learn-us-eas... / 48856256 Q 10 CASE 26 Meta Platforms, Inc. in 2023: Will the Company's Name Change Resolve Ethical Issues at Facebook and Instagram? - connect John E. Gamble Texas A&M University-Corpus Christi M eta Platforms. Inc. was created in October active person (MAP) users in 2023, the amount of time 2021 through the renaming of Facebook, Inc. users spent on Facebook and Instagram was decreasing, and reflected CEO Mark Zuckerberg's grand new user growth was declining, and annual advertising vision of the future of the internet. The newly named revenue growth had reversed from a 37 percent increase company would continue to operate Facebook's between 2020 and 2021 to 1 percent decrease between family of apps Facebook, Instagram, Messenger, 2021 and 2022. Opportunities for growth in social and WhatsApp and develop and market the compa- media usage in the United States and Canada were ny's Oculus VR goggles. Mark Zuckerberg called the almost nonexistent since saturation rates were near 100 renaming as "the beginning of the next chapter of the percent for Facebook and Instagram. Also, teens were internet, and it's the next chapter for our company reducing the number of sessions on Instagram as they too." His vision was an extensive online world that shifted to new platforms. The amount of time users of would exist across several technology platforms. The all ages spent on TikTok doubled between 2020 and metaverse was a concept based upon science-fiction 2021 and continued to increase in 2022 and 2023. Meta novels such as Ready Player One and Snow Crash and expected the use of Facebook to experience an overall would allow people to exist in a shared digital space decline of 4 percent by 2024, with usage among teens using avatars that would live as those in the physical expected to decline by 45 percent. world. Digital avatars of users would not only engage The company's name change also quickly followed in video games but could attend digital concerts, try the September-October 2021 publication of "The on digital clothes in digital stores, and work in digi- Facebook Files" by The Wall Street Journal-an inves- tal offices. Meta Platforms CEO Mark Zuckerberg tigative journalism series that chronicled information explained "We've gone from desktop to web to phones, gathered from internal Facebook documents disclosed from text to photos to video, but this isn't the end of by whistleblowers within the company. The investiga- the line. The next platform and medium will be even tive series profiled unethical business practices at the more immersive and embodied internet where you're company and focused on the company's algorithm in the experience, not just looking at it." changes that fostered discord, the company's rules Analysts believed that the company's shift to a focus that favored elites, the use of the company's apps by on the metaverse was largely in response to the declining drug cartels and human traffickers, and Instagram's growth of its flagship apps, Facebook and Instagram. effects on teenage girls. "The Facebook Files" was fol- While the company had more than 3.74 billion monthly lowed in October 2021 by a U.S. Senate Hearing that MacBook AirMeta Platform's, Inc. in... TR T more immersive and embodied internet where you're in the experience, not just looking at it.\"* 's believed that the company's shift to a focus verse was largely in response to the declining s flagship apps, Facebook and Instagram. ompany had more than 3.74 billion monthly SO o On et e company and focused on the company's algorithm changes that fostered discord, the company's rules that favored elites, the use of the company's apps by drug cartels and human traffickers, and Instagram's effects on teenage girls. \"The Facebook Files was fol- lowed in October 2021 by a U.S. Senate Hearing that i ~ 2 of 12 C-376 further investigated Facebook's business practices and heard testimony by former Facebook product manager and whistleblower, Frances Haugen. Ms. Haugen met before investigative committees in the U.S. Congress and lawmakers in the United Kingdom and European Union. Ms. Haugen stated that her intention was not to bring harm to Facebook but to make it better and that \"Until we bring in a counterweight, things will be operated for the shareholder's interest and not for the public interest.\"* However, in mid-2023, it was not clear that Mr. Zuckerberg's vision of the metaverse was serving the interest of shareholders. The company had found that user interest in metaverse games and applications was less than anticipated. In fact, sales of its Quest 2 virtual reality headsets which were essential to the metaverse experience had declined during the first quarter of 2023. Also, Meta Platforms was coming off a 2022 fiscal year that marked its first annual decline in revenues. As a result of the declining revenue, net income and cash flow, Meta Platform's March 2023 common shares were trading at about 60 percent of their value in mid-2020. The company had eliminated approximately 13 percent of its workforce in 2022 and announced in mid-2023 that it would reduce its workforce by an additional 13 percent in what Mr. Zuckerberg had described as a \"Year of Efficiency. COMPANY HISTORY AND BUSINESS MODEL Facebook was founded in 2004 by Harvard University students, Mark Zuckerberg, Eduardo Saverin, Chris Hughes, and Dustin Moskovitz, The original function- ality of the social media platform allowed Harvard University students to post a profile and photos using a template developed by Zuckerberg and his three friends. The site was extended beyond the Harvard campus and quickly grew in popularity as college students across the United States wished to keep in touch with out-of- town friends or share photos of their latest experiences. Thefacebook.com had more than 250,000 registered users from 34 universities by June 2004. Mastercard became Facebook's first source of revenue in 2004 when it began paying to place ads on the site. By year- end 2004, Zuckerberg had dropped out of Harvard and moved to Palo Alto, California, to concentrate on the Facebook business venture, became CEO of the startup and began to pitch the investment potential of the nascent business to Silicon Valley venture capitalists. PART 2 Cases In Crafting and Executing Strategy In 2005, Facebook dropped \"The\" from its \"thefacebook.com\" name, received $12.7 million in venture capital, and expanded account privileges to U.S. high school students and university students outside the United States. By 2006, anyone with a valid email address was allowed to have a Facebook account. Zuckerberg sold a 1.5 percent interest in the venture to Microsoft in 2007 for $240 million, which began a long-term friendship with Microsoft founder, Bill Gates. By 2008, Facebook had grown to be the largest social media platform and had made Zuckerberg a 24-year-old billionaire. The com- pany's 2012 initial public offering (IPO) pushed Zuckerberg's net worth to an estimated $19 billion. The company's business model primarily generated revenues from impression-based ads, with advertising fees based upon number of impressions displayed or number of clicks by users. Facebook's advertising model was especially powerful as marketers could target ads to Facebook users based upon information gathered by Facebook while the user scrolled posts from friends and read news stories. The company added its Messenger service in 2011 that allowed Facebook users to send private messages to other users. Facebook acquired rival Instagram in 2012 for $1 billion to gain access to a larger number of users and acquired the WhatsApp communications platform in 2014 for $19 billion. The company's Reality Labs division developed and marketed its Oculus virtual reality (VR) goggles and Facebook Portal video calling devices. The Reality Labs division was created after the 2014 acquisition of Oculus VR for $2 billion, Beat Games in 2019, and Ready at Dawn and Sanzaru Games in 2020. In 2021, the company had more than 3.59 billion monthly active persons (MAPs) accessing Facebook, Instagram, WhatsApp, and Messenger worldwide and annual revenues of $117.9 billion. Approximately 97.5 percent of Facebook's 2021 revenues were generated from advertising. The company's Reality Labs division contributed revenues of approximately $2.3 billion in 2021. Facebook changed its name to Meta Platforms, Inc. in late 2021 to reflect its aspira- tions to capitalize on the virtual reality capabilities of its Reality Labs division and extend Internet connectivity into more aspects of daily life. Exhibit 1 presents Meta Platform's consolidated statements of income for 2019 through 2022. The company's consolidated balance sheets for 2021 and 2022 are presented in Exhibit 2. Revenues by source and segment for 2020-2022 are shown in Exhibit 3. The company's operating income by segment for 2020-2022 is provided in Exhibit 4. CASE 26 Meta Platforms, Inc. in 2023: Will the Company's Name Change Resolve Ethical Issues C377 EXHIBIT 1 Meta Platforms, Inc's Consolidated Statements of Income, 2019-2022 ($ in millions, except per share amounts) 2022 2021 2020 2019 Meta Platform's, Inc. in... LOWILITICHUS UL SIAIC PrIOWS U1 UICHE 1ALESL EXPELICTICED. AVIVLA 1 1AUVLLLD, KUV, UL 1AW LULL W LEHISGL 1D adpuas Thefacebook.com had more than 250,000 registered tions to capitalize on the virtual reality capabilities of its users from 34 universities by June 2004. Mastercard Reality Labs division and extend Internet connectivity 's first source of revenue in 2004 into more aspects of daily life. Exhibit 1 presents Meta 3 Of 1 2 ng to place ads on the site. By year- Platform's consolidated statements of income for 2019 2rg had dropped out of Harvard and through 2022. The company's consolidated balance .0, California, to concentrate on the sheets for 2021 and 2022 are presented in Exhibit 2. Facebook business venture, became CEO of the startup ~ Revenues by source and segment for 2020-2022 are and began to pitch the investment potential of the ~ shown in Exhibit 3. The company's operating income nascent business to Silicon Valley venture capitalists. by segment for 2020-2022 is provided in Exhibit 4. CASE 26 Meta Platforms, Inc. in 2023: Will the Company's Name Change Resolve Ethical Issues C377 EXHIBIT 1 Meta Platforms, Inc's Consolidated Statements of Income, 2019-2022 ($ in millions, except per share amounts) 2022 2021 2020 2019 Revenue $116,609 $117,929 $85965 $70,697 Costs and expenses: Cost of revenue 25,249 22,649 16,692 12,770 Research and development 35,338 24,655 18,447 13,600 Marketing and sales 15,262 14,043 11,591 9,876 General and administrative 11,816 9,829 6,564 10,465 Total costs and expenses 87,665 71,176 53,294 46,711 Income from operations 28,944 46,753 32,671 23,986 Interest and other income, net {125) 531 509 826 Income before provision for income taxes 28,819 47,284 33,180 24812 Provision for income taxes 5,619 7914 4034 6.327 Net income 23200 $ 39370 $29,146 $18,485 Earnings per share attributable to Class A and Class B common stockholders: Basic $8.63 $1399 $1022 $6.48 Diluted $8.59 $1377 $1009 $6.43 Weighted-average shares used to compute earnings per share attributable to Class A and Class B common stockholders: Basic 2,687 2815 2851 2854 Diluted 2,702 2859 2888 2876 Source: Meta Platforms, Inc's 2022 Annual Report EXHIBIT 2 Meta Platforms, Inc.'s Consolidated Balance Sheets, 2021-2022 ($ in millions) 2022 piral Assets Current assets: Cash and cash equivalents $14,681 $16,601 Marketable securities 26,057 31,397 Accounts receivable, net 13,466 14,039 Prepaid expenses and other current assets 5,345 4,629 Total current assets 59,649 66,666 Non-marketable equity securities 6,201 6,775 Property and equipment, net 79,518 57,809 Operating lease right-of-use assets 12,673 12,155 Intangible assets, net 897 634 'Goodwill 20,306 19,197 Other assets 6,583 2,751 Total assets $185,727 $165,987 (continued) C-378 PART 2 Cases In Crafting and Executing Strategy EXHIBIT 2 (continued) Liabilities and stockholders' equity Current liabilities: Accounts payable $4,990 $4,083 Partners payable 1317 1,052 Operating lease liabilities, current 1,367 1,127 Accrued expenses and other current liabilities 19,662 14,873 Total current liabilities 27,026 21,135 Operating lease liabilities, non-current 15,301 12,746 Long-term debt 9,923 Other liabilities 7,764 7,227 Total liabilities 60,014 41,108 Commitments and contingencies QG Stockholders' equity: Meta Platform's, Inc. i Marketable securities 20,05/ 35397 Accounts receivable, net 13,466 14,039 n-~=~i' The company was very concerned about inap- propriately removing posts made by high-profile users such as elected officials, entertainment celeb- rities, or journalists. The company developed a program called \"Cross Check or \"XCheck\" that shielded VIP users from the company's normal enforcement processes. Offending content posted by VIPs and identified by Facebook employees could be removed with approval of senior executives or, in some cases, the approval of Mark Zuckerberg or Facebook Chief Operating Officer Sheryl Sandberg. The privilege was not extended to candidates for public office, only current office holdersa prac- tice that some suggested provided incumbents with an advantage in messaging to prospective voters. Facebook employees were baffled by XCheck, as elected officials might have a greater incentive to share misinformation. In addition, the accounts of politicians, celebrities, and other VIPs had the broadest reach, exposing far more users to misinfor- mation than was possible through a post of a typical Facebook user. An internal memo by a Facebook researcher stated \"We are knowingly exposing users to misinformation that we have the processes and resources to miligulc,"y Aninternal review at Facebook found that XCheck was \"not publicly defensible\" and that \"Unlike the rest of our community, these people can violate our standards without any consequences.\">> By 2020, Facebook included nearly anyone with a large social media following in the XCheck program, which had grown to approximately 5.8 million account hold- ers. In 2021, Facebook had informed its Oversight Board, which was created to ensure accountability in enforcement of its rules, that the number of XCheck accounts was small. Facebook spokesperson com- mented to The Wall Street Journal that XCheck \"was designed for an important reason: to create an addi- tional step so we can accurately enforce policies on content that could require more understanding.\"> Dissatisfied with lack of action on the XCheck pro- gram, the Oversight Board issued 32 recommenda- tions to reform the program. In March 2023, Meta Platforms management agreed to implement some of C-381 the Oversight Board recommendations, but refused to implement provisions to enhance transparency AR ) and prevent political favoritism.>* USER PROTECTION FAILURES AT FACEBOOK AND INSTAGRAM Facebook's unequal treatment of VIPs relative to typical users of the company's family of apps also seemed to apply to user protection for special groups of users such as users in developing markets and children. The company had also been cril ed for the use of its apps by drug cartels and in facilitating human trafficking across the world. FAILURES IN DEVELOPING MARKETS While Facebook was aggressive in its efforts to iden- tify and remove hate speech and misinformation in the United States, its efforts in developing markets appeared to be less of a priority. India was Facebook's largest market with 300 million Facebook users and 400 million WhatsApp users. Facebook users in the United States and Canada had fallen from about 30 percent of total users in 2010 to less than 10 percent of total users in 2021. The company's user base in India and Asia had increased from less than 20 per- cent of the company's total users in 2010 to more than 40 percent of total users in 2021. Despite the growth in users outside of the United States and Canada, the company devoted far fewer resources to combatting polarizing nationalist content, misinformation, vio- lence, and gore in India and other developing country markets than was allocated to its United States geo- graphic market. In 2020, Facebook employees and contractors spent more than 3.2 million hours search- ing and taking down posts the company deemed to be misinformation. Although more than 90 percent of Facebook's users were outside the United States, only 13 percent of those hours were spent working on con- tent outside the United States. The limited resources allocated to Facebook's largest markets were inconsis- tent with laws in countries such as India that required social media companies to remove inflammatory content that had the potential to undermine national security, public order, and \"decency and morality,\"** C-382 Independent researchers had found that that inflammatory content on Facebook spiked 300 per- cent following religious protests in the country dur- ing late-2019 when more than 50 people were killed during riots. Facebook researchers had concluded that the company's algorithms were emphasizing posts promoting misinformation and violence. Calls for violence had also spread widely on WhatsApp.2 India's government had threatened to jail Facebook and WhatsApp employees if their take-down requests of such inflammatory content were not honored. In 2020, India had temporarily ban; L instructed Twitter to block hundreds of accounts. PART 2 Cases in Crafting and Executing Strategy of social media a day."]Cl In 2022, CNN Business pro- filed the stories of dozens of families who believed their children's suicides were a result of social media platform algorithms that encouraged \"never-ending\" scrolling and exploited minor users' underdeveloped decision-making and impulse control <:apabilitie:s. facebook number of teen users had dropped consistently since the launch instagram and declined at an accelerated rate as snapchat tiktok emerged. more than million u.s. teens logged onto each day compared to just ll i day. also percent were meta platform inc. in... board which was created ensure accountability in enforcement its rules that xcheck small. spokesperson com- wall street journal r important reason: create addi- so we can accurately enforce policies on u wat could require understanding.> tisfied with lack of action on the XCheck pro- gram, the Oversight Board issued 32 recommenda- tions to reform the program. In March 2023, Meta Platforms management agreed to implement some of contractors spent more than 3.2 million hours search- ing and taking down posts the company deemed to be misinformation. Although more than 90 percent of Facebook's users were outside the United States, only 13 percent of those hours were spent working on con- tent outside the United States. The limited resources allocated to Facebook's largest markets were inconsis- tent with laws in countries such as India that required social media companies to remove inflammatory content that had the potential to undermine national security, public order, and \"decency and morality.\"* C-382 Independent researchers had found that that inflammatory content on Facebook spiked 300 per- cent following religious protests in the country dur- ing late-2019 when more than 50 people were killed during riots. Facebook researchers had concluded that the company's algorithms were emphasizing posts promoting misinformation and violence. Calls for violence had also spread widely on WhatsApp.2 India's government had threatened to jail Facebook and WhatsApp employees if their take-down requests of such inflammatory content were not honored. In 2020, India had temporarily banned TikTok and had instructed Twitter to block hundreds of accounts. A Facebook executive stated that the company had technical systems in place to catch offending content in five of the 22 languages spoken in India and that the company had human language expertise in many more languages and continued to work to improve its systems.\"' A former Facebook vice president com- mented to The Wall Street Journal that Facebook treats harm in developing countries as \"simply the cost of doing business.\" He continued that Facebook focused its user protection efforts on wealthier markets with powerful governments and media institutions.\" DAMAGES TO CHILDREN AND TEENS The effect of social media on teen mental health had long been of concern among the health care commu- nity, with bullying and other unhealthy dialog known to affect the self-esteem and emotional development of children and teens. As early as 2012, the United States National Institutes of Health published stud- ies considering the link between social media and teen suicides, which were reaching historic highs.29 A 10-year study of social media use and suicidality found that teenage girls who spent at least two to three hours per day on social media had a higher clinical risk for suicide as emerging adults. The lead author of the study summarized, \"Research shows that girls and women in general are very relationally attuned and sensitive to interpersonal stressors, and social media is all about relationships. At 13, girls are just starting to be ready to handle the darker underbelly of social media such as FOMO (fear of missing out), constant comparisons, and cyberbullying. A 13-year-old is probably not developmentally ready for three hours PART 2 Cases In Crafting and Executing Strategy of social media a day."30 In 2022, CNN Business pro- filed the stories of dozens of families who believed their children's suicides were a result of social media platform algorithms that encouraged \"never-ending\" scrolling and exploited minor users' underdeveloped decision-making and impulse control <:apabililie:s.31 facebook number of teen users had dropped consistently since the launch instagram and declined at an accelerated rate as snapchat tiktok emerged. more than million u.s. teens logged onto each day compared to just logging day. also percent were under years old. a internal docu- ment reported on by wall street journal stated penetration fb is low acquisi- tion appears be slowing down. company research indicated that daily using between it would likely fall addi- tional document labeled confidential commented ubiquity tablets phones kids are getting internet young six we can ignore this have responsibility figure out . imagine experience designed for youth. first product developed children was messenger launched in aged showed not catching with usage tapered off after age tweens viewed old people.35 team assigned study preteens given three-year goal increase among younger groups. expressed ultimate messaging primacy which may lead winning teens. facebooks efforts build its user base across groups resulted recommendation complement family apps six-age-bracket bundle products targeted adults late over policies complied pri- vacy laws forbidding data collection allowed register only kids. adam mosseri head case meta platforms inc. will name change resolve ethical issues c-383 they should our service new secret social media companies try understand how use technology. like all technology course want appeal next generation but entirely different from false assertion knowingly attempt recruit people who aren enough apps. noted how- ever mr. exclaimed don hear when influencer blurted during online event she been active almost decade. zuckerberg replied believe answer yes. senators richard blumenthal marsha blackburn fol- lowed up request release effect children. responded congressional six-page letter didn include information any studies conducted concluded aware consensus or experts about much screen time too much. result hearings announced delay planned platform in... suicides reaching historic highs. suicidality fomed tleot lo o s gir spent least two three higher clinical smerging adults. author zed shows girls wumen i geuardl very relationally attuned sensitive interpersonal stressors relationships. starting ready handle darker underbelly such fomo missing constant comparisons cyberbullying. probably developmentally hours determine affected users. conclusion interviews surveys make body image worse one blame increases anxiety depression. similarly independent united states kingdom found feel- ing unattractive group said good enough. interview joined followed fitness influencers reflected expe- rience stating went saw images chiseled bodies perfect abs women doing burpees minutes. another interviewed feel myself go then goes other complained small followers gut beautification filters bitter taste my mouth could quite unenhanced appearance. told sireet reporters inter- nal suggests app effects well- being small. mark called testify before congress march hearing focused impact his testimony offered seen connect positive mental health benefits. asked if studied y human trafficking international labour organization estimated there victims exploitation worldwide girls. these individuals trapped into private-sector domestic work agriculture sexual forced labor imposed state. prevalent every country including states. february attorney general merrick garland national strategy combat undercover operations carried department homeland security immigration customs enforcement. agencies made announcements successful opera- tions led arrests accused child sex arizona recovery west texas. documents employees notified superiors facilitate traffick- alert acted upon. revealed increasingly frustrated decision-makers post videos murders incitements violence threats against pro-democracy candidates advertisements trafficking. bbc apple began pressuring detect eliminate ads posts investigative c-384 instances violations. launching software tool identified dozen net- works end deactivated program. reacti- vated screen- systems operalion nevertheless tutor nairobi detailed her part cases crafting executing cing hitmen track payments photos bloody crime scenes shipments lethal drugs conduct illegal activity within mexico employee pointed specifically account video person gold pis- tol shooting man photo beaten tied chair trash bag filled severed hands.> Facebook began by responding to a Facebook job recruiting ad employees complained that CING met all criteria in January 2021. The young MMIS and Organizations\" des- Sadann To mind laaeitad e i i 10 of 12 Meta Platform's, Inc. in... T OO e, PO using Instagram's Beaut tion filters \"left a bitter taste in my mouth\" since the images could be quite -om a user's unenhanced appearance. head, Adam Mosseri, told Wall Street orters in May 2021 that Instagram's inter- n suggests the app's effects on teen well- being is likely \"quite small.\"* Mark Zuckerberg was called to testify before U.S. Congress during a March 2021 Congressional Hearing focused on Facebook's impact on children. During his testimony, Mr. Zuckerberg offered that \"The research that we've seen is that using social apps to connect with other people can have positive mental health benefits.\"*' When asked if the company had studied the likely effect of Instagram Kids, a product child sex trafficking in Arizona and the recovery of 70 missing children in West Texas. Facebook internal documents showed that when Facebook employees notified superiors of users using the company's apps to facilitate human traffick- ing, the alert may or may not be acted upon. These documents also revealed that Facebook employees were increasingly frustrated as decision-makers in the company that allowed users to post videos of murders, incitements to violence, threats against pro-democracy candidates, and advertisements for human trafficking.** The BBC and Apple began pressuring Facebook in 2019 to detect and eliminate ads and posts for human trafficking after an investigative team found C-384 more than 300,000 instances of human trafficking violations. Facebook responded by launching a software tool that identified a dozen human trafficking net- works by the end of 2020, but deactivated the program. The Wall Street Journal had notified Facebook that its employees had called for the software tool to be reacti- vated, but the company responded that \"similar screen- ing systems are in operation,' Nevertheless, a 28-year-old tutor in Nairobi detailed to The Wall Street Journal her experience that began by responding to a Facebook job recruiting ad in January 2021. The young woman was promised free airfare, a visa, and $300 per month to work with a cleaning service in Saudi Arabia. At the Nairobi air- port, a recruiter provided the woman with a contract to sign, which was 10 percent less pay than prom- ised in the ad, told only the employer could terminate the contract, and that her visa would be canceled if she quit. The young woman told the recruiter that she was not interested in the new terms and was backing out. The recruiter stated that her contract had already been sold to an employer and that she would need to immediately provide the recruiter with $2,000 to terminate the contract. With no money, the woman accepted the flight.* Once in Saudi Arabia, the woman was forced to sleep in a storage room with no air conditioning and could not leave a locked courtyard on the property. The young woman also was provided no medical care when she became sick and was never paid anything for her work that began at 5:00 a.m. and ended at dusk. Still with no money to terminate the contract, the woman posted about her plight on Facebook at which point the employment agency retrieved her from the property and left her with no passport at a detention center. Eventually, her Facebook post was seen by an official at the United Nations International Organization for Migration which helped negotiate her release and return to Kenya in July 2021.%' USE OF FACEBOOK, INC.'S FAMILY OF APPS BY DRUG CARTELS Facebook employees had discovered posts on Facebook and Instagram, as well as private mes- sages using WhatsApp, by the notorious Cartl Jalisco Nueva Generacion (CING) that captured vast criminal activity. The employee group found that PART 2 Cases in Crafting and Executing Strategy CJNG was using Facebook's family of apps to recruit hitmen, track payments to hitmen, post photos of bloody crime scenes, make shipments of lethal drugs, and conduct other illegal activity within Mexico and the United States. The Facebook employee group pointed specifically the CING's Instagram account, which showed a video of a person with a gold pis- tol shooting a young man in the head, a photo of a beaten man tied to a chair, and another photo of a trash bag filled with severed hands.'> Facebook employees complained that CJNG met all criteria for a \"Dangerous Individuals and Organizations\" des- ignation by Facebook and should be removed from platforms. After five months, some CING content was removed although new CING pages and posts appeared. Facebook officials told reporters at 7The Wall Street Journal that \"employees know that they can improve their anti-cartel efforts and that the com- pany is investing in artificial intelligence to bolster enforcement against such groups.\" FINES AND LEGAL SETTLEMENTS IN 2022 AND 2023 In late-2022 and early-2023, Meta Platforms was hit with a series of fines and legal settlements related to U.S. and European privacy law violations. Ireland's Data Protection Commissioner (DPC) levied a record $402 million fine against Meta Platforms in September 2022 after concluding a two-year investiga- tion into Instagram's handling of children's data. The DPC found that Instagram had allowed teens aged 13 to 17 to operate business accounts and had disclosed personal phone numbers and email addresses of teen users, which was in violation of Europe's privacy rules. Meta Platforms officials had stated that the company planned to appeal the fine.** The fine by Ireland's DPC followed the August 2022 announcement of the settlement of a class-action lawsuit filed in 2018 that involved Cambridge Analytica's harvesting of personal data of 87 million Facebook users. The data was collected from Facebook users who completed an online poll along with the data of their Facebook friends.* The attorneys representing Facebook users in the suit alleged that the privacy breach showed that Facebook was a \"data broker and surveillance firm,\" as well as a social network.* Just days earlier in August 2022, Meta Platforms reached a $37.5 million CASE 26 Meta Platforms, Inc. in 2023: Will the Company's Name Change Resolve Ethical Issues C-385 settlement of a lawsuit accusing Facebook of violat- ing users' privacy by gathering and selling data of users who had turned off Location Services on their smartphones. The lawsuit disclosed that despite users' intentions to block location tracking, Facebook tracked and sold user locations via Wi-Fi IP addresses to enable location-targeted advertising.\"' Ireland's Data Protection Commission again groups, and lawmakers in the United States, the United Kingdom, and the European Union. THE FUTURE OF META PLATFORMS As the name change of Facebook, Inc. to Meta found Meta Platforms in qimintisies skt s announced in late-October user data protection regulations in November 2022. 2021, Mark Zuckerberg concluded, \"Today we're 1:49 80 Meta Platform's, Inc. in... from the property and left her with no passport at a to 17 to operate business accounts and had disclosed detention center. Eventually, her Facebook post was personal phone numbers and email addresses of teen at the United Nations International users, which was in violation of Europe's privacy rules. 11 of 12 Migration which helped negotiate Meta Platforms officials had stated that the company urn to Kenya in July 2021.51 planned to appeal the fine. * The fine by Ireland's DPC followed the August 2022 announcement of USE OF FACEBOOK, INC.'S the settlement of a class-action lawsuit filed in 2018 that involved Cambridge Analytica's harvesting of FAMILY OF APPS BY DRUG personal data of 87 million Facebook users. The data CARTELS was collected from Facebook users who completed an online poll along with the data of their Facebook Facebook employees had discovered posts on friends." The attorneys representing Facebook users Facebook and Instagram, as well as private mes- in the suit alleged that the privacy breach showed sages using WhatsApp, by the notorious Cartel that Facebook was a "data broker and surveillance Jalisco Nueva Generacion (CJNG) that captured firm," as well as a social network." Just days earlier in vast criminal activity. The employee group found that August 2022, Meta Platforms reached a $37.5 million CASE 26 Meta Platforms, Inc. in 2023: Will the Company's Name Change Resolve Ethical Issues C-385 settlement of a lawsuit accusing Facebook of violat- groups, and lawmakers in the United States, the United ing users' privacy by gathering and selling data of Kingdom, and the European Union. users who had turned off Location Services on their smartphones. The lawsuit disclosed that despite users' intentions to block location tracking, Facebook THE FUTURE OF META tracked and sold user locations via Wi-Fi IP addresses PLATFORMS to enable location-targeted advertising. Ireland's Data Protection Commission again As the name change of Facebook, Inc. to Meta found Meta Platforms in violation of the country's Platforms, Inc. was announced in late-October user data protection regulations in November 2022. 2021, Mark Zuckerberg concluded, "Today we're The company was fined $300 million for allow- seen as a social media company. But in our DNA, ing Messenger and Instagram data belonging to we're a company that builds technology to connect 533 million people in 106 countries to be extracted people, and the metaverse is the next frontier." Jason and used for potential spamming and phishing Zweig, an opinion writer for The Wall Street Journal attacks. The DPC of Ireland also fined Meta cautioned that the name change may not resolve the Platforms $414 million in January 2023 for the company's declining numbers of users, slowing adver- Facebook and Instagram terms of use language that tising revenue growth, or its extensive ethical failures. required users to allow their data to be used for per- Mr. Zweig recalled that history had shown corporate sonalized ads. European Union regulations require name changes could add to a company's problems social media firms to provide data collection and sale rather than make them disappear and that "the risk 'opt out" options. $9 isn't that people won't like the name. It's that they'll Late in 2022, Meta Platforms announced that it like it too well-as a pithy incarnation of everything would disband its Responsible Innovation Team, which they dislike about the company." Mr. Zweig also had been tasked with assessing potential concerns about had doubts about the business prospects for the meta- new products and changes to Facebook and Instagram. verse by commenting "Some consumers will love it. A Meta spokesperson had stated that most of the 20 To others, it might sound like a dystopia of 'living' individuals making up the former task force would be on a video screen while eating cold pizza alone in doing similar watchdog work elsewhere in the com- a windowless basement, almost never seeing another pany but were not guaranteed continued employment human face-to-face." Mr. Zuckerberg's commitment with Meta. Time would tell if Meta Platforms would to the transformation of Facebook as the platform be able to resolve the ethical concerns expressed by for the metaverse was reflected in the company's The Wall Street Journal, employee whistleblowers, user $10 billion investment dedicated to the strategic goal. ENDNOTES . . . . . . . . . . As quoted in Deepa Seetharaman and https://www.facebook.com/about/ Center of Decision Making," The Wall Street Meghan Bobrowsky, "Mark Zuckerberg's Meta privacyshield, accessed May 30, 2022. Journal, October 24, 2021. Pivot Is Personal as Well as Strategic," The Wall Ibid. 16 As quoted in Deepa Seetharaman, Jeff Street Journal, October 29, 2021. As quoted in Keach Hagey and Jeff Horwitz, Horwitz, and Justin Scheck, "Facebook Says Al As quoted in Christopher Mims, "Facebook Facebook Tried to Make Its Platform a Will Clean Up the Platform. Its Own Engineers Joins a Crowded Field in the Race to Build Healthier Place. It Got Angrier Instead," The Have Doubts," The Wall Street Journal, the 'Metaverse.' We All Have a Stake in the Wall Street Journal, September 15, 2021. October 17, 2021 Outcome," The Wall Street Journal, October Ibid. Ibid 29, 2021. 9Ibid. 18 Ibid As quoted in Sam Schechner and Stu Woo 10 Ibid. 19 Jeff Horwitz, "Facebook Says Its Rules Apply "Facebook Whistleblower Frances Haugen 1Ibid. to All. Company Documents Reveal a Secret Calls for New Tech Laws in Europe," The Wall 12 Ibid. Elite That's Exempt," The Wall Street Journal, Street Journal, October 25, 2022. 13 Ibid. September 13, 2021. 4 Jeff Horowitz, Salvador Rodriguez, Sam 14 Jeff Horwitz and Justin Scheck, "Facebook "Ibid Schechner, and Newley Purnell, "Meta Plans New Increasingly Suppresses Political Movements Ibid Layoffs That Could Match Last Year's in Scope," It Deems Dangerous," The Wall Street Journal, 22 Ibid. The Wall Street Journal, March 10, 2023. October 22, 2021. 23 Ibid. As quoted in "Meta Platforms