Risk factor changes · META

What changed in Meta Platforms's risk factors

Item 1A (Risk Factors) of Meta Platforms's FY2025 10-K compared with its FY2024 10-K, sentence by sentence.

Newer: 10-K filed 2026-01-29 · Older: 10-K filed 2025-01-30

New in the latest 10-K 49

• In April 2025, the European Commission issued a final decision that our "subscription for no ads" model does not comply with such requirements.
• We made significant modifications to LPA since the European Commission issued its final decision.
• We have appealed the European Commission's decision but further modifications to our model may be imposed during the appeal process, which could result in a materially worse user experience for European users and a significant impact to our European business and revenue.
• If our investments are not successful longer-term, our business and financial performance could be harmed.
• For example, we have been the subject of media and government scrutiny relating to AI and AI chatbots, including inquiries and investigations by the FTC, members of Congress and state attorneys general.
• Our AI initiatives also depend on our access to data to effectively train our models, which is subject to risks related to the availability or costs of data, regulatory or other legal developments, or other factors, as well as our ability to attract and retain specialized personnel in a limited and competitive talent market.
• In addition, AI may not develop in accordance with our expectations, and market acceptance of features, products, or services we build is uncertain.
• We regularly evaluate our product roadmaps and make significant changes as our understanding of the technological challenges and market landscape of AI, as well as our product ideas and designs, continue to evolve.
• From time to time we make product changes and offer tools to promote creative content on our platform, but we may not be successful in obtaining or attracting engaging third-party content.
• We also compete with companies in the development and application of AI, particularly with respect to the development of frontier AI models, as well as the development and delivery of consumer hardware and augmented and virtual reality products and services.
• We have also been, and expect to continue to be, subject to media coverage in connection with litigation matters.
• For example, several bellwether trials in our youth-related litigation matters are scheduled for 2026 and beyond.
• We have made significant investments in AI initiatives, including investments in infrastructure and headcount, including specialized technical personnel, to support our efforts to enhance our products, features, and advertising tools, as well as to develop and train our AI models, and expect to continue to increase these investments.
• Our ability to support these investments is dependent on generating sufficient profits from other areas of our business.
• From time to time we may also seek to raise additional capital through debt, equity, or other financing arrangements to support our business operations, strategic initiatives, or other corporate purposes.
• Such financings may not be available on favorable terms or at all.
• The incurrence of additional debt also results in increased fixed obligations and interest expense, while the issuance of additional equity securities results in dilution to our stockholders.
• If we are unable to obtain adequate financing when needed, our ability to finance our business operations and initiatives could be adversely affected.
• In the fourth quarter of 2025, we made certain updates to the methodology we use for this estimation, including to incorporate updated data signals as a result of improvements in our ability to identify activity we believe to be violating our policies, as well as to focus on the most recent account activity when determining whether to include a person in our violating accounts estimation.
• We believe the increase compared to our prior estimation was a result of the methodology update described above.
• We face inventory risk with respect to our consumer hardware products.
• We have seen an increase in litigation and threatened claims related to the provision of our services to younger users, and expect to face similar litigation in the future, including as global youth-related regulation continues to evolve.
• Certain jurisdictions have applied novel or aggressive interpretations of their laws in an effort to raise additional tax revenue from companies such as Meta, and we may experience similar developments in the future.
• Our future income tax rates could be volatile and difficult to predict due to changes in jurisdictional profit split, changes in the amount and recognition of deferred tax assets and liabilities, or by changes in tax laws, regulations, or accounting principles. 33 Table of Contents Changes in tax laws or tax rulings could materially affect our financial position, results of operations, and cash flows.
• In the absence of active OECD discussions, countries may continue imposing unilateral tax measures, such as digital services taxes, outside existing treaty frameworks.
• These measures may proliferate in the absence of bilateral or multilateral agreement.
• In addition, ongoing volatility due to international trade may prompt foreign governments to expand regulatory authority or adopt new measures, increasing compliance risks, taxes, and operational complexities.
• Following the enactment of OBBBA, excess tax benefits from share-based compensation may not be realizable as a result of the Corporate Alternative Minimum Tax (CAMT).
• From time to time we issue significant equity to attract additional employees or to retain our existing employees, resulting in substantial additional share-based compensation expense and dilution to the ownership of our existing stockholders.
• For example, the bases upon which we have relied for data transfers from the European Union to the United States have been subjected to regulatory and judicial scrutiny.
• We have also implemented steps to comply with the above corrective orders and are pending the IDPC's confirmation that these address the corrective orders.
• DPF), which the European Commission deemed adequate in relation to U.S. data transfers in July 2023.
• In April 2025, the European Commission issued a final decision that our "subscription for no ads" model does not comply with such requirements.
• We made significant modifications to LPA since the European Commission issued its final decision.
• We have appealed the European Commission's decision but further modifications to our model may be imposed during the appeal process, which could result in a materially worse user experience for European users and a significant impact to our European business and revenue.
• In the UK, the OSA establishes similar types of obligations.
• We are facing similar challenges in other jurisdictions, including Europe, Latin America, and Asia-Pacific.
• For example, various EU member states are currently considering a range of legislation from mandatory age verification requirements to banning minor access to social media services.
• Additionally, in June 2025, the Brazilian Supreme Court partially invalidated the country's intermediary liability framework, which previously limited platform responsibility for third-party content.
• The new court-established liability framework requires platforms to remove unlawful content upon private notice and to implement adequate measures to prevent and remove illegal ads and content related to certain crimes under local law, resulting in civil liability in case of non-compliance.

Reworded 141

Removed words are struck through; added words are highlighted.

• Risks Related to Government Regulation and Enforcement government restrictions on access to Facebook or our other products, or other actions that impair our ability to sell or deliver advertising, in their countries; complex and evolving U.S. and foreign privacy, data use, data combination, data protection, content and content moderation, competition, youth, safety, consumer protection, advertising, and other laws and regulations, including the General Data Protection Regulation (GDPR), Digital Markets Act (DMA), Digital Services Act (DSA), UK Online Safety Act (OSA), Artificial Intelligence Act (EU AI Act), and the UK Digital Markets, Competition and Consumer Act (DMCC); the impact of government investigations, enforcement actions, and settlements, including litigation and investigations by privacy, consumer protection, and competition authorities, among others; 14 12 Table of Contents our ability to comply with regulatory and legislative privacy requirements, including our consent order with the Federal Trade Commission (FTC);
• In addition, For example, in connection with the war in Ukraine, access to Facebook and Instagram was restricted in Russia and these services were then prohibited by the Russian government, which contributed to slight decreases in the size of our active user base following the onset of the war.
• Any number of factors can negatively affect user retention, growth, and engagement, including if: users increasingly engage with other competitive products or services; we fail to introduce new features, products, or services that users find engaging or if we introduce new products or services, or make changes to existing products and services, that are not favorably received; users feel that their experience is diminished as a result of the decisions we make with respect to the frequency, prominence, format, size, and quality of ads that we display; users have difficulty installing, updating, or otherwise accessing our products on mobile devices as a result of actions by us or third parties that we rely on to distribute our products and deliver our services; user behavior on any of our products changes, including decreases in the quality and frequency of content shared on our products and services; we are unable to continue to develop products for mobile devices that users find engaging, that work with a variety of mobile operating systems and networks, and that achieve a high level of market acceptance; 15 13 Table of Contents there are decreases in user sentiment due to questions about the quality or usefulness of our products or our user data practices, concerns about the nature of content made available on our products, or concerns related to privacy, safety, security, well-being, or other factors; we are unable to manage and prioritize information to ensure users are presented with content that is appropriate, interesting, useful, and relevant to them; we are unable to obtain or attract engaging third-party content; we are unable to successfully maintain or grow usage of and engagement with applications that integrate with our products; users adopt new technologies where our products may be displaced in favor of other products or services, or may not be featured or otherwise available; there are changes mandated by legislation, government and regulatory authorities, or litigation that adversely affect our products or users; we are unable to offer a number of our most significant products and services, including Facebook and Instagram, in Europe, or are otherwise limited in our business operations, as a result of European courts invalidating the EU-U.S.
• DPF or regulators, courts, or legislative bodies determining that the legal bases we rely upon to transfer user data from the European Union to the United States are invalid; there is decreased engagement with our products, decreased efficiency of our advertising products, or failure to accept our terms of service, as part of changes that we have implemented or may implement in the future, whether voluntarily, in connection with the GDPR, the European Union's ePrivacy Directive, the DMA, the DSA, the DMCC, U.S. state privacy laws including the California Consumer Privacy Act, as amended by the California Privacy Rights Act (CCPA), laws, youth social media laws, or other laws, regulations, or regulatory actions, or otherwise; technical or other problems prevent us from delivering our products in a rapid and reliable manner or otherwise affect the user experience, such as security breaches or failure to prevent or limit spam or otherwise objectionable content, or users feel their experience is diminished as a result of our efforts to protect the security and integrity of our platform; we adopt terms, policies, or procedures related to areas such as sharing, content, user data, or advertising, or we take, or fail to take, actions to enforce our policies, that result in our removal of users from our platform or are perceived negatively by our users or the general public, including as a result of decisions or recommendations from the independent Oversight Board regarding content on our platform; we elect to focus our product decisions on longer-term initiatives that do not prioritize near-term user growth and engagement (for example, we have announced plans to focus product decisions on optimizing the young adult experience in the long term); we make changes in our user account login or registration processes or changes in how we promote different products and services across our family of products; initiatives designed to attract and retain users and engagement, including the use of evolving technologies such as generative artificial intelligence, are unsuccessful or discontinued, whether as a result of actions by us, our competitors, or other third parties, or otherwise; third-party initiatives that may enable greater use of our products, including low-cost or discounted data plans, are scaled back or discontinued, or the pricing of data plans otherwise increases; there is decreased engagement with our products as a result of taxes imposed on the use of social media or other mobile applications in certain countries, internet shutdowns, or other actions by governments that affect the accessibility of our products in their countries (for example, beginning in the first quarter of 2022, our user growth and engagement were adversely affected by the war in Ukraine and service restrictions imposed by the Russian government); we fail to provide adequate customer service to users, marketers, developers, or other partners; 16 14 Table of Contents we, developers whose products are integrated with our products, or other partners and companies in our industry are the subject of adverse media reports or other negative publicity, including as a result of our or their user data practices; or our current or future products, such as our development tools and application programming interfaces that enable developers to build, grow, and monetize applications, reduce user activity on our products by making it easier for our users to interact and share on third-party applications.
• Our advertising revenue can also be adversely affected by a number of other factors, including: decreases in user engagement, including time spent on our products; our inability to continue to increase user access to and engagement with our products; product changes or inventory management decisions we may make that change the size, format, frequency, or relative prominence of ads displayed on our products or of other unpaid content shared by marketers on our products; our inability to maintain or increase marketer demand, the pricing of our ads, or both; our inability to maintain or increase the quantity or quality of ads shown to users; changes to the content or application of third-party policies that limit our ability to deliver, target, or measure the effectiveness of advertising, including changes by mobile operating system and browser providers such as Apple and Google; adverse litigation, government actions, or legislative, regulatory, or other legal developments relating to advertising, including developments that may impact certain advertisers' ability to advertise on our platform or our ability to deliver, target, or measure the effectiveness of advertising; user behavior or product changes that may reduce traffic to features or products that we monetize at a higher rate, such as our Feed and Stories products, including as a result of increased usage of our Reels or other video or messaging products; reductions of advertising due to our efforts to implement or enforce advertising policies that protect the security and integrity of our platform or that we believe are needed to comply with global content, security, or integrity obligations; 17 15 Table of Contents the availability, accuracy, utility, and security of analytics and measurement solutions offered by us or third parties that demonstrate the value of our ads to marketers, or our ability to further improve such tools; loss of advertising market share to our competitors, including if prices to purchase our ads increase or if competitors offer lower priced, more integrated, or otherwise more effective products; limitations on our ability to offer a number of our most significant products and services, including Facebook and Instagram, in Europe as a result of European courts invalidating the EU-U.S.
• DPF or regulators, courts, or legislative bodies determining that the legal bases we rely upon to transfer user data from the European Union to the United States are invalid; limitations on our ability to deliver ads to users under the age of 18 and, in some cases, to continue to offer certain products or services to certain cohorts of users, whether voluntarily, as a result of new laws, regulations, or government actions in the United States and other jurisdictions, or otherwise; changes in our marketing and sales or other operations that we are required to or elect to make as a result of risks related to complying with laws or regulatory requirements or other government actions; decisions by marketers to reduce their advertising as a result of announcements by us or adverse media reports or other negative publicity involving us, our user data practices, our advertising metrics or tools, content on our products, our interpretation, implementation, or enforcement of policies relating to content on our products (including as a result of decisions or recommendations from the independent Oversight Board), developers with applications that are integrated with our products, or other companies in our industry; reductions of advertising by marketers due to illegal, illicit, or otherwise objectionable content made available on our products by third parties, questions about our user data practices or the security of our platform, concerns about brand safety or potential legal liability, or uncertainty regarding regulatory developments or their own legal and compliance obligations, including with respect to artificial intelligence; the effectiveness of our ad targeting or degree to which users consent to, opt out of, or reduce the use of data for ads, including as a result of product changes and controls that we have implemented or may implement in the future in connection with the GDPR, ePrivacy Directive, DMA, DMCC, U.S. state privacy laws including the CCPA, laws, and other laws, regulations, regulatory actions, or litigation, or otherwise, that impact our ability to use data for advertising purposes (for example, in response to regulatory developments in Europe, we began offering our users a "subscription for no ads" alternative in the European Union, European Economic Area, and Switzerland, and subsequently in November 2024 provided users in those regions who elect to continue receiving our services free-of-charge, supported by ads, an option to see less personalized ads); the degree to which users cease or reduce the number of times they engage with our ads; changes in the way advertising on mobile devices or on personal computers is measured or priced; the success of technologies designed to block the display of ads or ad measurement tools; changes in the composition of our marketer base or our inability to maintain or grow our marketer base; and the impact of macroeconomic and geopolitical conditions, whether in the advertising industry in general, or among specific types of marketers or within particular geographies, which in turn can have broader effects in other regions (for example, the war in Ukraine and service restrictions imposed by the Russian government have adversely affected our advertising business in Europe and other regions, and advertiser spending also can be is subject to adverse effects from conflicts in the Middle East or and the implementation of tariffs or other existing or future trade policies by the United States, China, or and other governments).
• The occurrence of any of these or other factors in the future, including our enforcement efforts, could result in a reduction in marketer spend or demand for our ads, which may reduce the prices we receive for our ads, could cause marketers to stop advertising with us altogether, or could otherwise negatively affect our revenue and financial results, and could be material. 18 16 Table of Contents Our ad targeting and measurement tools incorporate data signals from user activity on websites and services that we do not control, as well as signals generated within our products, and changes to the regulatory environment, third-party mobile operating systems and browsers, and our own products have impacted, and we expect will continue to impact, the availability of such signals, which will adversely affect our advertising revenue.
• For example, legislative and regulatory developments, such as the GDPR, ePrivacy Directive, DMA, and U.S. state privacy laws, including the CCPA, have impacted, and we expect will continue to impact, our ability to use such signals in our ad products.
• In particular, we have seen increases in the number of users opting to control certain types of ad targeting in Europe following product changes implemented in connection with our GDPR and ePrivacy Directive compliance, and we have introduced product changes that limit data signal use for certain users in California certain U.S. states following adoption of the CCPA. state privacy laws.
• Other A number of U.S. state privacy laws, such as the Texas Data Privacy and Security Act, the Colorado Privacy Act, and the Oregon Consumer Privacy Act, are introducing laws have introduced additional rights for users and could result in restrictions on our use of signals from third-party apps and websites through certain browser- and device-based universal opt-out mechanisms.
• In response to these developments, in November 2024, we began offering users in the European Union, European Economic Area, and Switzerland who elect to continue using our services free-of-charge, supported by ads, an option to see less personalized ads, ads (LPA), which are expected to be less relevant and effective than our premium ad offerings.
• In addition, mobile operating system and browser providers, such as Apple and Google, have implemented product changes and/or announced future plans to limit the ability of websites and application developers to collect and use these signals to target and measure advertising.
• We are dependent on the interoperability of our products with popular mobile operating systems, networks, technologies, products, and standards that we do not control, such as the Android and iOS operating 17 Table of Contents systems and mobile browsers.
• Changes, bugs, or technical issues in such systems, or changes in our relationships with mobile operating system partners, handset manufacturers, browser developers, or mobile carriers, or in the content or application of their terms of service or policies (which they have made in the past and continue to seek to implement) that degrade our products' functionality, reduce or eliminate our ability to update or distribute our products, give preferential treatment to 19 Table of Contents competitive products, limit our ability to deliver, target, or measure the effectiveness of ads, or charge fees related to the distribution of our products or our delivery of ads have adversely affected, and could in the future adversely affect, the usage of our products and monetization on mobile devices.
• For example, we have relatively limited experience with consumer hardware products and virtual, augmented, virtual and mixed augmented reality technology, which may adversely affect our ability to successfully develop and market these evolving products and technologies.
• For example, we continue to launch new AI features on our products, including support for new modalities, conversational AIs, stickers and AI profiles, stickers, photos, videos, and editing tools.
• Our In addition, our efforts to implement default end-to-end encryption across our messaging services on Facebook and Instagram have been subject to governmental and regulatory scrutiny in multiple jurisdictions.
• If our new products or changes to existing products fail to engage users, marketers, or developers, or if our business plans are unsuccessful, we may fail to attract or retain users or to generate sufficient revenue, operating margin, or other value to justify our investments, and our business may be adversely affected. 18 Table of Contents We may not be successful in our artificial intelligence initiatives, which could adversely affect our business, reputation, or financial results.
• We are making have made significant investments in AI initiatives, including generative AI, AI and superintelligence, to, among other things, recommend relevant content across our products, enhance our advertising tools, develop new products, and develop new features for existing products. products, and expect to continue to increase these investments.
• If our investments are not successful longer-term, our business and financial performance could be harmed. 20 Table of Contents There are significant risks involved in developing and deploying AI and there can be no assurance that the usage of AI will enhance our products or services or be beneficial to our business, including our efficiency or profitability.
• For example, our AI-related efforts, particularly those related to generative AI, AI and superintelligence, subject us to risks related to harmful or illegal content, accuracy, misinformation and deepfakes (including related to elections), bias, discrimination, toxicity, consumer protection, products liability, intellectual property infringement or misappropriation, defamation, data privacy, cybersecurity, and sanctions and export controls, among others.
• In addition, we are subject to the risks of new or enhanced governmental or regulatory scrutiny, scrutiny and enforcement, litigation, or other legal liability, ethical concerns, negative consumer perceptions as to automation and AI, activities that threaten people's safety or well-being on- or offline, including with respect to younger users, or other societal harms or complications that could adversely affect our business, reputation, or financial results.
• As a result of the complexity and rapid development of AI, it is also the subject of evolving review and investigation by various governmental and regulatory agencies in jurisdictions around the world, which are applying, or are considering applying, platform moderation, intellectual property, products liability, cybersecurity, export controls, consumer protection, and data protection laws to AI and/or are considering general legal frameworks on AI (such as the recently passed EU AI Act).
• Other Further, we face significant competition from other companies may develop that are developing their own AI features and technologies, including competition from AI features and technologies that are may be similar or superior to our technologies or are more cost-effective to develop and deploy. deploy, or that otherwise achieve more timely or successful market acceptance.
• Further, our ability to continue to develop and effectively deploy AI technologies is dependent on access to specific third-party equipment equipment, technology, and other technical and physical infrastructure, such as processing hardware, network capacity, models, computing power, and related energy requirements, as to which we cannot control the availability or pricing, especially in a highly competitive environment.
• As such, we cannot guarantee that third parties will not use such AI technologies for improper purposes, including through the dissemination of illegal, inaccurate, defamatory or harmful content, intellectual property infringement or misappropriation, furthering bias or discrimination, cybersecurity attacks including spear phishing attacks, data privacy violations, other societal harms, including activities that threaten people's safety or well-being on- or offline, or to develop competing technologies.
• It is not possible to predict all of the risks related to the use of AI and changes in laws, rules, directives, and regulations or other regulatory developments regarding the use of AI, including restrictions around the collection and use of 19 Table of Contents data, may adversely affect our ability to develop and use AI or subject us to legal liability.
• Similarly, 21 Table of Contents from time to time we update our Feed display and ranking algorithms or other product features to improve the user experience, and these changes have had, and may in the future have, the effect of reducing time spent and some measures of user engagement with our products, which could adversely affect our financial results.
• In addition, we have relatively limited experience with consumer hardware products and virtual, augmented, virtual and mixed augmented reality technology, which may enable other companies to compete more effectively than us.
• We expect to continue to make significant investments in virtual, augmented, virtual and mixed augmented reality and other technologies to support these efforts, and our ability to support these efforts is dependent on generating sufficient profits from other areas of our business.
• In addition, as our Reality Labs efforts evolve, we may be subject to a variety of existing or new laws and regulations in the United States and international jurisdictions, including in the areas of privacy, safety, AI, competition, content regulation, medical devices, tariffs, export controls, consumer protection, and e-commerce, which may delay or impede the development of our products and services, increase our operating costs, require significant management time and attention, or otherwise harm our business. 20 Table of Contents As a result of these or other factors, our Reality Labs strategy and investments may not be successful in the foreseeable future, or at all, which could adversely affect our business, reputation, or financial results.
• As a result of these or other factors, our Reality Labs AI strategy and investments may not be successful in the foreseeable future, or at all, which could adversely affect our business, reputation, or financial results.
• We will also continue to experience media, legislative, or regulatory scrutiny of our actions or decisions regarding user privacy, data use, encryption, content, product design, algorithms, advertising, competition, generative AI, superintelligence, younger users, and other issues, including actions or decisions in connection with elections or geopolitical events, which has adversely affected, and 22 Table of Contents may in the future adversely affect, our reputation and brands.
• Our brands may also be negatively affected by the actions of users that are deemed to be hostile or inappropriate to other users, by the actions of users acting under false or inauthentic identities, by the use of our products or services to disseminate information that is deemed to be misleading (or intended to manipulate opinions), by perceived or actual efforts by governments to obtain access to user information for security-related purposes or to censor certain content on our platform, by the use of our products or services for illicit or objectionable ends, including, for example, any such actions around geopolitical events or elections in the United States and around the world, by decisions or recommendations regarding content on our platform from the independent Oversight Board, by research or media reports concerning the perceived or actual impacts of our products or services on user well-being, by our decisions regarding whether to remove enforce against content or suspend or disable participation on our platform by persons who violate our community standards or terms of service, or by any negative sentiment associated with our management.
• Certain of our actions, such as the foregoing matter regarding developer misuse of data and concerns around our handling of political speech and advertising, speech, hate speech, and other content, advertising, and deceptive activity on our platform, as well as user well-being issues, have eroded confidence in our brands and may continue to do so in the future.
• We may not be able to continue to successfully maintain or grow engaging third-party content on our platform or usage of and engagement with applications that integrate with our products.
• We have made and are continuing to make investments to enable creators to contribute engaging third-party content to our platform and developers to build, grow, and monetize applications that integrate with our products.
• Such In addition, existing and prospective developers may not be successful in building, growing, or monetizing applications that create and maintain user engagement.
• Additionally, developers Developers may also choose to build on other platforms, including platforms controlled by third parties, rather than building products that integrate with our products.
• For 21 Table of Contents example, from time to time, we have taken actions to reduce the volume of communications from these developers to users on our products with the objective of enhancing the user experience, and such actions have reduced distribution from, user engagement with, and our monetization opportunities from, applications integrated with our products.

Removed since the previous 10-K 27

• For example, the COVID-19 pandemic led to increases and decreases in the size and engagement of our active user base from period to period at different points during the pandemic.
• We may not be successful in our artificial intelligence initiatives, which could adversely affect our business, reputation, or financial results.
• Further, we face significant competition from other companies that are developing their own AI features and technologies.
• Our AI initiatives also depend on our access to data to effectively train our models.
• Our Reality Labs efforts include our metaverse and wearables initiatives.
• We also compete with companies that develop and deliver consumer hardware and augmented, mixed, and virtual reality products and services.
• In addition, from time to time, we may take actions in response to competitive threats, but we cannot assure you that these actions will be successful or that they will not negatively affect our business and financial results.
• We are subject to the risk of catastrophic events and crises, which may have a significant adverse impact on our business and operations.
• Any one of the foregoing factors may adversely affect our operating results.
• We may pay substantial amounts of cash or incur debt to pay for acquisitions or other strategic transactions, which has occurred in the past and could adversely affect our liquidity.
• Changes in tax laws or tax rulings could materially affect our financial position, results of operations, and cash flows.
• There are ongoing OECD negotiations that contemplate an alternative to these proposals, which may proliferate in the absence of multilateral agreement.
• For example, in 2024, excess tax benefits recognized from share-based compensation decreased our provision for income taxes by $3.22 billion and our effective income tax rate by five percentage points as compared to the tax rate without such benefits.
• For example, in 2016, the European Union and United States agreed to a transfer framework for data transferred from the European Union to the United States, called the Privacy Shield, but the Privacy Shield was invalidated in July 2020 by the Court of Justice of the European Union (CJEU).
• In addition, the other bases upon which Meta relies to transfer such data, such as Standard Contractual Clauses (SCCs), have been subjected to regulatory and judicial scrutiny.
• On October 7, 2022, President Biden signed the Executive Order on Enhancing Safeguards for United States Signals Intelligence Activities (E.O.), and on June 30, 2023, the European Union and the three additional countries making up the EEA were designated by the United States Attorney General as a qualifying state under Section 3(f) of the E.O.
• On July 10, 2023, the European Commission adopted an adequacy decision in relation to the United States.
• The adequacy decision concludes that the United States ensures an adequate level of protection for personal data transferred from the European Union to organizations in the United States that are included in the Data Privacy Framework List, maintained and made publicly available by the United States Department of Commerce pursuant to the EU-U.S.
• The implementation of the EU-U.S.
• DPF and the adequacy decision are important and welcome milestones, and we have implemented steps to comply with the above corrective orders following engagement with the IDPC.
• We have been subject to other significant legislative and regulatory developments, which together with proposed or new legislation and regulations could significantly affect our business in the future.
• Additionally, Brazil has an intermediary liability framework limiting liability for third-party content, which has been challenged as unconstitutional and is under review by the Brazilian Supreme Court.
• For example, the CFPB issued its anticipated Larger Participant Rule, effective January 2025, allowing the CFPB to conduct supervisory activities over general-use digital consumer payment applications.
• The Rule, which is under legal challenge by a trade association, could subject certain of our payments products to this authority.
• We may also be subject to increased risk as a result of changes to our content policies and enforcement efforts which we began to implement in January 2025 to further free expression on our platform and mitigate over-enforcement of certain of our content policies.
• Defending intellectual property litigation is often costly and can impose a significant burden on management and employees, and there can be no assurances that favorable final outcomes will be obtained in all cases.
• Our status as a controlled company could make our Class A common stock less attractive to some investors or otherwise harm our stock price.

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