Meta Platforms Inc. (NASDAQ: META), is the focus of attention after the European Commission fined the company an astounding EUR797.72 millions ($840.24million) for anti-competitive behavior related to Facebook Marketplace.
In a press release today, the Commission stated that the tech giant has “abused its dominant position in social media to impose unfair trading conditions” on online classified services providers.
Meta intends to appeal the decision, but a representative of the company confirmed that the firm will work together with regulators in order to find a solution which addresses the concerns.
Meta Stock is down by less than 1% following Thursday’s EU news.
What is the importance of Meta Stock?
Meta Platforms’ stock is not likely to suffer from the EU fine.
The Commission of the European Union has been known to penalize tech giants such as Apple Inc. and Google. Meta has been hit by fines before from the European Union. Last week, South Korea fined Meta $15.67m for collecting unauthorized data.
Rarely have punitive measures resulted into a long-term overhang in their stock price.
Meta’s shares have remained resilient in recent months, also due to the fact that the management intends on appealing the decision. This is significant because Alphabet Inc.’s EUR1,49 billion fine for antitrust violations from the European Commission was overturned in September 2024 by an EU Court.
Meta will not have to pay any fine if its appeal is successful. Investors have no reason to be concerned.
Does this EU fine have anything to do with Trump’s win?
Donald Trump, the 47 th president of the United States, is likely to raise tariffs on European Union goods as he becomes the 47 th president. The bloc will respond with new taxes.
This makes us wonder if today’s hefty fine imposed by the Commission on Meta Platforms was a preemptive act of retaliation for the upcoming Trump tariffs.
It’s just speculation, but it seems that the EU has been preparing for a possible trade war. This could include more fines of a large amount against US companies such as Meta.
Meta’s stock is up by 70% since the beginning of 2024.
Is Meta stock worth investing?
Meta’s shares may experience a short-term decline in value due to the new European Commission fine. This could be an opportunity for investors, given that Wall Street has assigned them a “overweight rating” by consensus.
Loop Capital has recently increased its target price on this technology stock from $655 to $655, which suggests that there is a potential of close to 15 percent upside.
Meta Platforms’ third-quarter results for the month of October were well above street estimates.
Loop believes that the financial performance of the company, along with its AI leadership will continue to be a positive factor for Meta’s stock over the next few months. Meta Platforms also pays a modest yield on its dividends.
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