European Union’s General Data Protection Regulation has had a serious impact on Facebook’s user base. According to the recent announcement by Facebook, it was revealed that the company’s stocks fell by 20 percent, wiping over $130 billion off its market value. This was because Facebook’s revenue and user growth in the second quarter of 2018 fell short of investor expectations.
According to Facebook, the company lost about 1 million monthly active users in Q2 2018.
In the first quarter of 2018, Facebook had 377 million monthly active users (MAU) in Europe, whereas in the second quarter the number has decreased to 376 million MAU. The decrease may not be much, however, it can be said that this is possibly due to the implementation of the GDPR, by the European Union in May 2018.
Another possible reason could be the Facebook-Cambridge Analytica data breach this year when personal information of up to 87 million users, mostly in the United States, was shared without consent with political consultancy firm Cambridge Analytica.
The social media giant has seen an increase of only 11 percent (year-over-year) with 2.23 billion reported monthly active users, which is the slowest growth the company has seen in more than two years.
Also as the mid-terms are around the corner, Facebook, along with Google and Twitter have been summoned to testify before the Senate Intelligence Committee this year in September to face questioning by the lawmakers regarding foreign interference on their platforms.
Facebook’s chief operating officer Sheryl Sandberg, Twitter CEO Jack Dorsey and Google CEO Sundar Pichai are expected to be at the hearing.
Facebook is also taking some safety measures. On 24 July it said that it is using a range of techniques including artificial intelligence to counter Russian operatives or others who use deceptive tactics and false information to manipulate public opinion.
While a loss of 1 million users in Europe doesn’t guarantee a trend for the downfall in future, the numbers might just keep falling because it seems that Europeans are a little more sensitive when it comes to privacy issues than the rest of the world.
Facebook will have to revamp its systems or get into a habit of losing more users, slowly and gradually.