- Facebook's user base is declining in Europe, where privacy laws are stricter.
- Facebook's privacy chief supports introducing new privacy laws in the US.
- That raises the prospect of decline in the US, too.
Facebook's user base has declined in Europe, the company reported Tuesday on its third-quarter earnings call. It is the second quarter in a row in which Facebook has lost European users.
The decline is significant because Facebook has more users in Europe than it does in the US. The downshift comes after the Cambridge Analytica privacy scandal and the implementation of Europe's new continent-wide privacy law known as GDPR.
The two issues have been on Europe's front pages for months, forcing users to acknowledge how much information they are giving away. Facebook's response to the GDPR rules required all users to inspect their privacy settings - and the result seems to have been that many users dialed down their engagement with the app.
Facebook executives have promised they will follow Europe's lead on privacy regulation in the US, raising the future prospect of similar declines in North America.
- Facebook monthly active users in Europe: 375 million
- Facebook monthly active users in the US: 242 million
Two million users have abandoned the service in Europe on a monthly basis since the first quarter, and 4 million have abandoned it on a daily basis. The third quarter was the first full quarter in which the GDPR rules were in force.
- Decline in European monthly active users, Q1 to Q3: 377 million to 375 million
- Decline in European daily active users, Q1 to Q3: 282 million to 278 million
When asked at a conference in Europe last week whether she would support the introduction of an equivalent to GDPR in the US, Facebook's chief privacy officer, Erin Egan, said "yes." "We support strong and effective privacy legislation in the United States and around the world," Egan said. "We recognize the value of regulation of privacy."
CEO Mark Zuckerberg has also made noises about being more careful with user privacy, though he has not specifically supported an American version of GDPR. Apple CEO Tim Cook, speaking at the same conference, said he would support such a move. Some US lawmakers are considering a new privacy law.
The decline in daily active users in Europe, peak to trough, was 1.4%. If a similar decline happened in the US, Facebook would lose about 3.4 million users, based on Tuesday night's numbers.
Facebook stock was up about 5% in premarket trading Wednesday morning, perhaps because declines from GDPR were already priced in. Zuckerberg had warned investors on his first-quarter call to expect declines as a result of GDPR. Historically, Facebook's stock price has been sensitive to its user-growth numbers. US user growth in the third quarter was flat. Daily active users dipped by 1 million in the US in the fourth quarter of 2017, the only time that market has shown a sign of weakness.