Meta to Stop Selling Political Ads in the EU

Key Takeaways

Now it just seems again and again the EU regulation is just in friction and combat with big tech here in the United States. >> This is just the latest Caroline. It's been a pretty steady stream of combative you know back and forth between Meta and regulators in the EU. Obviously the latest as you mentioned has to do with targeting of political ads. meta uh there is new regulation I believe it's coming uh online in October that makes it very difficult to target without getting very uh direct data source from the the user themselves with permission to target them with political ads and Meta has obviously decided that juice is not worth the squeeze here in that regard and so they're going to just get rid of that business entirely. >> Well, I'd like to ask a little bit more about that. There's more than 450 million people in the European Union. So on paper it's a big market, but I think that Meta and specifically the CFO Susan Lee have talked about how generally political advertising isn't that material a contributor to to revenue. Anyway, >> yeah, you're absolutely right. At the beginning of last year, so at the beginning of 2024, as we were heading into the US election cycle, Susan Lee, the CFO of META, was asked on an earnings call about, you know, the the political ad business. She basically said it's not material. Uh I believe in 2020 it wasn't even in the top 10 uh categories in terms of advertising spend on on uh Meta's various platforms. So you can see why they're willing to walk away here uh from that business because it does not you know it is not a a material revenue growth driver for them anyways. What it all sets us up for, Kurt, is also seeing how Alphabet, I think Google had already pulled away in terms of their focus on political ads. But when we're thinking in the context of the AI action plan in the US and what that means for EU regulation and trying to lead the charge, it really feels as though the US is just walking away from the EU in many ways like they have done with their generative AI offerings in the EU as well. When it comes to meta, >> that's right. I think we're seeing, you know, two very different paths between regulators in the US, regulators in the EU, as you mentioned, Caroline, at the beginning of this conversation, constantly in uh combative mode with EU regulators, meta, not so much uh here in the US. Obviously, they are still dealing with antitrust related stuff and the FTC and all of that, but generally a much more friendly uh regulatory environment in in the US, a lot of self-regulation from these tech companies. Europe is not really taking that same stance and it feels like it's getting wider and more dramatically different, you know, by the month