Facebook user numbers to fall in Europe as tougher data laws bite

FACEBOOK is facing the prospect of falling user numbers in Europe for the first time as a result of new European data laws.

After years of steady increases in monthly active users, a key metric for social media companies to measure how many people are using the site, Facebook could see European users numbers stall or even decline, industry experts said ahead of its results today.

Industry experts predict users may turn away from the site thanks to the impact of the General Data Protection Regulation, after Facebook required hundreds of millions of European users to opt-in to having data collected.

The three-month results come after a far-reaching scandal that saw personal data from tens of millions of Facebook profiles sold by a researcher and used for political advertising by election consultants Cambridge Analytica.

A decline in user numbers would add to fears that the company’s growth in its biggest markets is saturated. Last year, Facebook reported the number of North American users had fallen for the first time. Wedbush Securities managing director Michael Pachter told The Daily Telegraph: “European monthly active users grew sequentially over the last four quarters to end at 377m. We estimate zero sequential growth for June, ending again at 377m.”

During the company’s last earnings call in May, Facebook chief financial officer David Wehner said the social network expected its daily active users and monthly active users to be “flat to slightly down”. It is also thought to have around 20m users under the age of 16 in Europe, according to analysis by Barclays. These younger users will be required to gain additional parental consent to keep using Facebook under the new data rules. The bank estimated it could lose up to 3m regular EU users.

Although its main social network has started to experience a slowdown, its other social media plays are expected to keep up ferocious growth. Instagram, the picture-sharing app owned by Facebook, hit 1bn users earlier this year, the firm announced in June.

Analysts are expecting Facebook to post around $13.3bn (£10.1bn) in revenue for the three months to June, up 43pc on the previous year. Facebook’s share price has increased around 18pc since its last set of results in May.

Earlier this week, the owner of search giant Google, Alphabet, saw revenue jumped 26pc to $32.7bn.