EU targets addictive feeds and AI companions, putting Meta's revenue at risk

Brussels is drafting rules that would force Meta to hand users clear ways to switch off the engagement tools designed to keep them scrolling. The same package takes aim at AI systems built to mimic personal intimacy — the kind of conversational agents Meta is rolling across its apps. Violations could cost up to 6% of global revenue.

That reach goes further than screen time. The rules would touch how Meta configures AI ranking, ad load and simulated relationships — the machinery behind both engagement and its highest-converting ad formats, where it fights Alphabet and ByteDance.

The stakes are big because the spending is. Meta's 2026 capital expenditure is guided at US$130–145b, tied to large multi-year compute commitments, and the investment case leans on that AI infrastructure turning into durable earnings. An analysis of the company puts fair value at US$848 a share.

Regulation and youth-safety are already treated as central constraints on that capex plan rather than background noise, per the same analysis. The test is whether Meta can redesign feeds, Reels and its AI companions to satisfy Brussels while holding its edge in ad performance and messaging monetization.