A Day of Extremes for Meta: Regulatory Storm Clouds as Threads Overtakes X

Meta Platforms Inc. experienced a day of stark contrasts this Thursday. On one hand, its newest platform, Threads, achieved a significant milestone by surpassing its rival X in mobile user engagement for the first time. Simultaneously, the social media behemoth found itself confronting the threat of a multi-billion dollar penalty from European Union regulators. This juxtaposition highlights the dual challenges of aggressive growth and increasing regulatory scrutiny facing the company.

Threads Surpasses X in Mobile User Metrics

In a notable shift within the social media landscape, Meta’s Threads app has overtaken X in daily active mobile users. According to data from the analytics firm Similarweb, Threads attracted an average of 130.2 million daily active users on mobile devices during the week of September 15 to 21. This figure narrowly eclipsed the 130.1 million users recorded by X during the same period.

This achievement represents a major victory for Threads, which only launched in 2023. The platform has effectively capitalized on user dissatisfaction following Elon Musk’s acquisition and rebranding of the former Twitter. Surpassing the established competitor on mobile is particularly significant, as mobile engagement is widely viewed as a critical indicator for future advertising revenue and monetization potential—areas where Meta has historically demonstrated considerable strength.

Looming EU Penalty Over Content Moderation

The celebratory mood was tempered by a serious regulatory challenge emerging from Brussels. The European Commission is preparing to file formal charges against Meta, alleging that its flagship platforms, Facebook and Instagram, lack adequate systems for users to report and remove illegal content. These alleged shortcomings would constitute a violation of the EU’s Digital Services Act (DSA).

The financial repercussions for Meta could be severe. The company faces a potential fine of up to 6% of its global annual revenue. Based on Meta’s revenue of approximately $135 billion last year, the maximum penalty could exceed $8 billion. The formal charges are anticipated to be filed in the coming weeks.

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Concurrent Advances in Artificial Intelligence

Amid these developments, Meta continues to aggressively pursue its artificial intelligence ambitions. Reports indicate that the company is in discussions with Google regarding the potential integration of Google’s advanced Gemini AI model into Meta’s advertising infrastructure. A collaboration of this nature between the two tech giants could significantly enhance the precision of ad targeting on Facebook and Instagram.

Furthermore, on Thursday, Meta began rolling out a new AI-generated video feed named “Vibes” within its Meta AI application. This launch is another component of the company’s broader strategy to embed AI technology across its product ecosystem.

Critical Tests on the Horizon

The coming weeks will be pivotal for Meta as it navigates this complex environment of operational success and regulatory pressure. A key event is the U.S. sales launch of the highly anticipated Meta Ray-Ban smart glasses with a display on September 30. This product will serve as a crucial test for the company’s vision of AI-powered wearable devices.

Shortly after, at the end of October, Meta will release its next quarterly earnings report. Investors will be scrutinizing the results not only for advertising revenue figures but also for updates on Threads’ user growth and any financial provisions set aside for the potential EU fine.