Tech News Today: Robinhood Stock Drops, Meta Offers to Cut EU Fee.
Markets has finally achieved its expansion to the U.K., at the third time of asking. However, the trading platform is doing so without two key sources of revenue.
launched commission-free trading throughout the U.K. on Tuesday. It first planned a British operation as far back as 2020 but has twice had to scrap the project. The launch is finally accomplished, but Robinhood has had to pause plans to also introduce margin lending, which allows users to borrow money from the company in order to make trades, while it holds talks with British regulators.
That could be a significant blow as margin interest is one of Robinhood’s most significant sources of revenue. The profitability of the expansion was already under question as the U.K. doesn’t allow payment for order flow—the system by which a broker routes customer orders to market-makers in return for a commission—which is another source of revenue for Robinhood in the U.S.
Still, Robinhood has previously said it could be years before the U.K. business becomes profitable, so there’s no reason to panic.
For now the major driver of Robinhood’s share price is cryptocurrency prices, which have boosted trading and the company’s share price. Robinhood shares were down 7.5% in early trading on Tuesday as crypto prices fell but were up 43% this year through Monday’s close.
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Meta Offers to Slash European Subscription Fees
is trying to win over European regulators when it comes to its efforts to comply with privacy rules without hurting its revenue.
has sought to comply with European Union rules that users should be given the ability to opt out of personalized advertising. It is offering an ad-free version of its Instagram and Facebook social networks, supported by a monthly fee. However, a price of €9.99 ($10.83) a month has caused critics to argue the social-media company is charging an exorbitant amount for the right to privacy.
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Now Meta is offering to reduce the monthly ad-free fee to €5.99 ($6.50) following discussions with privacy regulators, according to Reuters, citing a statement from a Meta lawyer to a European Commission hearing.
Putting a price on privacy is a difficult question and one that internet companies have often preferred to avoid. That doesn’t seem to be an option for Meta now, so it’s testing the market—but when the counterparty is the regulatory apparatus of an entire continent, price discovery is inevitably somewhat erratic.
Write to Adam Clark at [email protected]
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