A picture taken on May 5, 2021 shows a flag of the European Union flying outside the European … More
The EU is presently trying to limit a prominent source of income for Meta. The biggest victims will be European businesses.
The EU wants to force Meta to provide Facebook and Instagram to users for free, even if they choose to navigate both without ads. Translated, the EU’s actions amount to a price control. Facebook and Instagram are user-supported sites paid for through ads, only for the EU to demand free access. That Meta would be trying to restrain an EU out to harm its business is self-explanatory.
Just the same, it should be remembered that what’s good for Meta is even better for the customers that place ads on Facebook and Instagram. Which means the much more urgent protests against the EU’s efforts to foist price controls on Meta should come from European businesses, and for that matter any businesses out to serve the European market.
The answer for why can be found in newspapers and magazines that grow skinnier and more economically challenged by the day. The previous thickness of both was evidence of what’s obvious: newspapers and magazines were similarly ad supported. Which was the point, but also the problem.
While print media strived mightily to know reader tastes and interests as well as possible, there were limits. Short of literally watching their readers as they turned the pages of newspapers and magazines, there was no way to know in real time what ads attracted the attention of what reader, when, and how much. Only for the internet and social media to largely solve the problem.
While the effect of advertising in print always brought with it speculative information purchased very expensively (see the expense accounts of from the halcyon days of print!), internet ads brings the purchasers of those ads real information gleaned in real time through the tracking of what users stop and look at while scrolling through Facebook, Instagram, and all sorts of other social media.
That businesses place a high value on the information-rich fruits of social media advertising is similarly self-explanatory. Exactly because Facebook, Instagram and others can divine the likes, interests and dislikes of users right down to the individual, they can by extension offer businesses intensely bespoke advertising opportunities. See the aforementioned thin magazines and newspapers to develop a sense of how valuable online advertising is for businesses that pay for it.
Bringing it back to European businesses and businesses more broadly out to serve the European market, it’s hopefully evident why the EU’s actions against Meta will be most painfully felt by the businesses that substantially rely on Instagram and Facebook as a way to reach customers, learn about potential customers, and most often both. While Meta will potentially lose a valuable income stream, the businesses that rely on Instagram and Facebook will lose lifelines. Seriously, what’s the effective alternative to social media advertising that will make it possible for businesses to reach the European market? And if the answer is newspapers and magazines, their shrinking stature is visible evidence that they didn’t come to close to providing what Facebook and Instagram do.
Which is a crucial reminder of a truth that is too often ignored by regulators of all stripes: what’s good for the biggest, most valuable businesses like Meta is even better for the smaller ones reliant on them. In other words, Meta and its wildly popular social media sites like Instagram and Facebook are prosperous precisely because their existence enables much greater prosperity for their customers.
