Brazil Orders Meta to Justify Fact-Checking Cancellation or Face Penalties

The Brazilian government issued a 72-hour ultimatum to Meta (NASDAQ: META) on January 10, 2025, threatening legal action if the tech giant fails to explain its decision to terminate fact-checking operations.

The move sent Meta’s shares tumbling 2.3% to $380.45 on Wall Street. It also impacted the company’s dominant position in Brazil‘s social media landscape, where it reaches 89% of online users.

Digital Rights Minister Paulo Silva emphasized that Meta’s platforms must comply with national sovereignty or face daily fines of up to R$150,000 ($30,000). “Brazil’s digital sovereignty is non-negotiable,” Silva stated at a São Paulo press conference.

The decision affects Facebook’s 160 million Brazilian users and Instagram’s 122 million active accounts. These platforms generated R$12.4 billion ($2.5 billion) in advertising revenue in 2024, marking a 15% increase from 2023.

BTG Pactual tech analyst Maria Santos warns that Meta’s decision could trigger similar regulatory responses across Latin America. In the region, social media platforms generate R$76 billion ($15.2 billion) annually.

Brazil Orders Meta to Justify Fact-Checking Cancellation or Face Penalties. (Photo Internet reproduction)

The situation echoes Brazil’s 2023 standoff with Telegram, which resulted in a R$4.5 million ($900,000) settlement. Regional implications are already emerging, with Argentina, Chile, and Colombia announcing plans to review their social media regulations.

Meta’s representatives will meet with Brazilian authorities on January 15 to discuss compliance options. Meanwhile, the company’s stock faces pressure from regulatory uncertainties across its key Latin American market, which accounts for 18% of its global user base.