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In addition to Facebook.com, Meta Platforms also owns Instagram, WhatsApp, Oculus, Giphy and Mapillary, and has a 9.99% stake in Jio Platforms. Meta earns its revenue from the following revenue sources: Includes revenue generated from displaying ad products on Facebook, Instagram, Messenger, and third-party affiliated websites or mobile applications. Includes revenue generated from Facebook Reality Labs, consumer hardware devices, and net fees from developers using Facebook’s Payments infrastructure. The contributions from each of Meta's revenue segments in their 2020 annual report were as follows: Since Meta relies almost exclusively on advertising revenue, it is laser focused on capturing as much of its users' attention as possible often at the expense of the well-being of its users.How much of Meta’s revenue comes from haram?
If it needs to show vulgar and indecent posts to keep its users’ attention, then that's what it will show.
If it needs to show conspiracy theories and political extremes, then that’s what it will show.
A business model where the interests of the business are at odds with the well-being of its customers is fundamentally unIslamic.
Not to mention revenue generated from advertisem*nts that promote haram products/services, such as alcohol and gambling, is impermissible.
Practical Islamic Finance concludes:
A material portion of Meta's revenue comes from haram.
Does Meta rely on interest to operate?
| Year-to-Date for period ended 6/30/2021 | Fiscal year ended 12/31/2020 | Fiscal year ended 12/31/2019 | |
|---|---|---|---|
| Interest Income (net) | $239,000 | $672,000 | $904,000 |
| Total Revenue | $55,248,000 | $85,965,000 | $70,697,000 |
| Interest Expense (net) | - | - | - |
| Total Expenses | $31,503,000 | $53,294,000 | $46,711,000 |
| Interest Income (net) / Revenue | 0.43% | 0.78% | 1.28% |
| Interest Expense (net) / Total Expense | - | - | - |
Practical Islamic Finance concludes:
Riba is used but not relied upon in Meta’s operations.
What is Meta’s Environmental, Social, and Governance (ESG) impact?
Environment
In 2020, Facebook achieved net-zero greenhouse gas emissions, 100% renewable energy use in its global operations, and restored nearly 5.8 million cubic meters of water in high water-stressed regions.
Social
Practical Islamic Finance believes Facebook’s platforms were likely created with positive intentions and have had some positive impacts.
That said, it is clear Facebook and its various platforms, like Instagram, have had negative consequences, including being used as tools to spread misinformation and extremist views as well as post immodest images and promote un-Islamic themes and media.
Governance
Facebook has a long history of getting in trouble for anti-competitive practices, sharing its users' personal data with websites and advertisers, and in 2019, collecting audio messages from private voice chats on its Messenger app.
Practical Islamic Finance concludes:
Meta has a net negative ESG impact.
Comfort Rating
From Meta's business, financial, and ESG reviews, Practical Islamic Finance rates Meta stock as:
Uncomfortable to invest in from a Halal perspective.
Justification for our Rating
While Meta and its various platforms certainly have some positive influences, the negative byproducts of continuously striving to grab larger shares of its customers’ attention, inadequate care for its customers’ privacy, and promotion of media that do not meet Islamic standards make us uncomfortable investing in Meta from a halal perspective.
Sources
Facebook’s Latest Audio Transcription Scandal Exposes a Key Dilemma of AI
How to Apply for Permission to Promote Online Gaming or Gambling
I've delved into various aspects of Meta Platforms, its revenue streams, operational structure, and its ethical implications, providing insights into financial, social, and governance aspects of the company. Let's break down the concepts highlighted in the article:
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Meta Platforms and its Revenue Sources: The article mentions Meta Platforms, the parent company of Facebook, Instagram, WhatsApp, Oculus, Giphy, Mapillary, and a stakeholder in Jio Platforms. Meta's revenue largely comes from advertising (ad products on Facebook, Instagram, Messenger, and affiliated platforms) and other sources like Facebook Reality Labs, hardware devices, and developer fees through Facebook's Payments infrastructure.
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Ethical Concerns and Revenue from Inappropriate Content: The article highlights ethical concerns regarding Meta's business model. It mentions Meta's potential willingness to display controversial or inappropriate content to capture user attention, even if it compromises user well-being. Revenue generated from ads promoting products or services deemed "haram" (forbidden in Islam), such as alcohol and gambling, is also brought into question.
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Interest Income and Riba in Meta's Operations: The article touches upon Meta's financials, specifically interest income and expenses. It suggests that while Meta does have some interest-related transactions, it doesn't heavily rely on interest (riba) to operate.
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Environmental, Social, and Governance (ESG) Impact: Meta's ESG impact is evaluated across three key areas:
- Environment: Meta achieved net-zero greenhouse gas emissions, utilized renewable energy globally, and contributed to water restoration in high-stressed regions in 2020.
- Social: Positive intentions in platform creation, but negative impacts through the spread of misinformation, extremist views, and content conflicting with Islamic values.
- Governance: History of privacy issues, anti-competitive practices, and data sharing, such as collecting audio messages from private chats in the Messenger app.
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Comfort Rating and Halal Investment Perspective: Practical Islamic Finance rates Meta stock as uncomfortable to invest in from a Halal (permissible in Islamic law) perspective. Despite positive influences, concerns about user privacy, content quality, and the drive for user attention raise discomfort in ethical investing.
The article sources information from various reports, financial filings (such as Facebook's 10-K and 10-Q), and Meta's sustainability report, along with references to specific instances illustrating the company's practices and impacts.
If you have any specific questions about these aspects or need further details, feel free to ask!
