Amid a plummeting share price, Facebook Inc. wants panicked investors to believe Europe’s strict General Data Protection Regulation is to blame for fewer people using the social network in the region. EU lawmakers disagree.
The new law came into force on May 25 and forced companies that hold data on EU citizens to obtain “unambiguous” consent to collect personal information. Facebook knows a lot about what people are interested in, and makes that audience easily available to advertisers. That’s fueled rapid revenue growth, billions of dollars in profit, and a surging stock price in recent years.
More than $100 billion of those market gains were wiped out Thursday after Facebook reported sales and user growth numbers that disappointed Wall Street. The company lost about 1 million of European monthly active users in the second quarter, leaving it with 376 million. Daily users fell more. Chief Financial Officer David Wehner blamed the decline on the GDPR roll out.
“We saw the declines that we anticipated from GDPR,” he said. “And I would say there, really, those impacts were purely due to the GDPR impact, not other engagement trends.”