On 4th of January, when an Indian Tribunal rejected Google’s plea and ordered it to pay Rs 1,300 crore as the penalty imposed by the anti-trust regulator for anti-competitive practices, a British court imposed a €390m (about 350 pounds) fine on Meta platforms for illegal use of users’ data in targeted ads.

“Facebook and Instagram cannot ‘force consent’ by saying consumers have to accept how their data is used, or leave the platform,” said the Irish Data Protection Commission (DPC), asking the company to change its data usage policy within three months. As Facebook and Instagram have European headquarters in Ireland, the DPC assumes the role of EU data regulator.

The US-based tech giant lost 60 per cent of its share value in a year following macroeconomic headwinds and a massive dent to its ad business (mainly due to Apple's privacy policy), and investors’ dwindling confidence in its metaverse ambitions.

To manage the finances, the company announced in November that it would lay off roughly 13% of its workforce or more than 11,000 employees. Around the same time, top Meta executives like Chief Operating Officer Sheryl Sandberg, legendary developer John Carmack, Meta India head Ajit Mohan, Policy chief Rajiv Aggarwal and WhatsApp India head Abhijit Bose parted ways with the company.

These developments also sparked a debate in the media and advertising fraternity – will Meta will be able to better its prospects in 2023, especially under the current global economic scenario and waning investor confidence in the company's metaverse ambitions?

After all, Facebook alone has close to three billion users, including 400 million users in India. Almost all major brands in India spend a significant chunk of their digital advertising budget on Facebook and Instagram.

Besides, micro, small and medium enterprises, especially the ones which switched to online marketing during the pandemic years, are largely dependent on Meta for advertising.

Paras Mehta, Chief Business Officer, Matterkind, an IPG Reprise company, says, “I think Meta has a great potential to bounce back provided they get authentic and true to themselves, and they enhance their audience offering solutions. However, I don't think there will be a substantial increase in their market share this year.”

However, some media experts say FB ad formats are expected to experience the slowest growth due to saturation, lack of innovation and the growth of eCommerce platforms.

Industry observers also blame Meta’s obsession for the metaverse as one of the prime reasons for its current situation. “Reality Labs, Meta’s metaverse segment, saw $3.7bn in losses in Q2 alone. The company is still committed to its metaverse pivot rather than improving its core business through innovations,” a senior digital media expert said.

She further said, “Zuckerberg wants to ramp up WhatsApp payments. However, it has been quite challenging due to a highly competitive market dominated by Google Pay and Paytm.”

Anil Solanki, a media expert, noted that Meta’s platforms will struggle until the economy recovers and advertisement revenue channels open back up. However, it will bounce back riding on the metaverse only.

“The social media giant is spending billions of dollars to develop the metaverse and making itself future-ready. The year 2023 might be a lean year for the company but it is expected to bounce back,” Solanki opines.

Regulatory challenges ahead

The past couple of years has been challenging for Meta as an increasing number of countries started examining anti-competitive practices and illegal use of consumers’ data by the tech giants.

Indian antitrust regulator Competition Commission of India (CCI) is also probing into WhatsApp's privacy policy for 2021. WhatsApp is owned by Meta Platforms.

The European Commission and the US Federal Trade Commission are also probing Meta after allegations of antitrust and privacy issues.

“What could harm the giant the most is the US Journalism Competition and Preservation Bill. If passed, it might have to share a large share of its ad revenue with digital news publishers. This could be a big setback for the company whose market share is shrinking in the US due to the phenomenal growth of TikTok and ecommerce platforms,” a senior media expert said.

Meta has threatened to remove news content altogether from its US platform to bypass the Bill. However, experts say it is unlikely to do so to safeguard its long-term interests not only in the US, but across the world.

Observers said, “To avoid potential business loss, Meta negotiated a deal on the same issue with the Australian government last year.”

e4m has reached out to Meta to understand its business projections for India and the stand on ongoing legal cases. Their response is awaited.