The privacy GDPR law introduced in Europe will become effective on May 25. The laws have forced Facebook, Inc. Common Stock (NASDAQ:FB) to review its Terms of Service in a bid to comply with the new law.
During the release of the first quarter 2018 earnings report, David Wehner, the company’s CFO said that MAU or DAU may be flat or down in the second quarter with the GDPR becomes operational. He added that although Facebook does not expect a lot of impact on its ads business as a result of the GDPR rollout, there may be a small effect and the company will be on the lookout for any such impact. According to Wehner, GDPR will have a big impact on the online advertising industry globally hence it may be difficult to estimate the exact effect that the laws will have on Facebook in particular.
Wehner said that the company has been working to bring its users to full consent of the new laws by updating its Terms of Service. The social media giant elaborated how in the event that that users change their ad privacy setting would make the ads less effective and hence advertisers would pay very little.
Wehner is however optimistic that the company will continue building a wonderful ads business while at the same time protection users’ privacy and improving experience on its platform. He added that the most important factor in the wake of the new GDPR laws is to ensure advertisers get value for their money because the laws will have a big impact on all ad platforms.
Facebook introduced some changes on its platform in response to the GDPR laws and explained to its users on how to respond to the changes. The move attracted a lot of criticism. In developing the consent flow, the company used “dark patterns” coercing its users to agree to the changes without full consideration. The company reduced the size as plus the visual prominence of the buttons used to revoke permissions from Facebook or out rightly reject changes or close down their accounts. The company is working hard to ensure that there is very little disruption to user experience and maintain its user count.