There are signs that Meta’s plans for the metaverse is faltering, including plummeting stock prices and the company’s announcement that it may withdraw from the EU market. The troubles stem from a myriad of issues, the most significant of which are data collection privacy issues and a lack of investor and public confidence in the company’s plans.
Meta’s plans for data collection and targeted advertising
Meta has plans to collect substantially more personal data in the metaverse. The Financial Times analyzed a series of patents granted to Meta last month by the United States Patent and Trademark Office (USPTO), revealing details of how Meta will track users’ facial expressions through a VR headset to “adapt media content” . In addition to collecting data on metrics like user’s age, social contacts, and shopping preferences, data will be collected on biometric information such as body poses, pupil movements, and nose scrunching . In sum, the driving force behind Meta’s expansion plan centers around increasing user data collection and targeted advertising.
Neck Clegg, Meta’s president of global affairs, made the company’s direction clear in the Financial Times interview. “For us, the business model in the metaverse is commerce-lead,” Clegg said. “Clearly ads play a part in that.”
If the idea of giving over more substantial personal data wasn’t enough, Reuter’s reported last month  that Meta plans to include three-dimensional advertising in the metaverse. If you are already tired of obtrusive advertisements, just imagine being presented with an oversize branded sauce bottle when you visit an eatery in VR. Unlike in Web 3.0, where you can turn your gaze away from the offending ad, the immersive nature of virtual reality means that you may be unable to avoid interacting with the product’s sights, sounds, and smells.
The public is wary of these plans, states economist Usman W. Chihan in a recent analysis . He notes that a parody video — depicting Zuckerberg in VR as a “frightening villain” touting a bottle of barbecue sauce — sets an interesting tone for the current state of public opinion on the project.
The stock market reflects investor opinion of Meta
Proof of the public’s disdain may lie with Meta’s stock price plunge since the company’s name change announcement last fall. Following a historic 26% share price drop in February , prices continued to slide downward from a high of $384 per share last September, before Facebook’s announcement, to $222 at close of trading on April 8th . And it’s not just investors who are wary — it’s investment firms as well. Nasdaq reports that the exchange-traded fund Subversive Metaverse ETF, which launched last January, is “is investing in anything related to the metaverse — except Meta Platforms” .
The equity markets are punishing Facebook for several reasons, writes Chihan, including a declining user base, over investment, and poor reception of the metaverse project.
Data protection laws may thwart Meta’s plans
While there are good reasons to be concerned about the possibility of personal data collection on an unprecedented scale, there are signs that Meta may not be able to achieve its goal of harvesting data at will. For example, the EU has plans to put tougher restrictions on data collection and transfer with The Digital Markets Act. The act will also give users much greater control over what they see online and includes a provision to allow people to decide whether they want targeted advertising . On 24 March, a preliminary agreement was reached on the act; it is expected to become law in the near future.
The additional compliance costs associated with the upcoming act and inability to transfer user data from the EU to the U.S. has led to Meta warning it may withdraw from the region if the law is passed  – ironic considering that Meta recently announced it intends to build its metaverse center in Spain . Similar laws are in motion across the U.S.; Zach Gregg, writing for the University of Miami’s Law Review, states that it’s just a “matter of time” before data privacy legislation is passed at the federal level .
Chihan concludes that issues with user privacy are just a hint of a much larger problem with Meta’s plans. “The condition of virtual crimes being magnified, of trade-offs in technology, of user privacy, and of anti-social elements dominating the space,” he wrote. “All augur poorly for metaverse/metacurse eventuality.”