Quick take:
- Meta’s request to exclude the proposal from the ballot at the upcoming shareholders’ meeting was rejected by the SEC.
- The proposal calls for a third-party assessment of potential harms caused by Meta’s metaverse.
- The proposal was filed by investment management firm Arjuna Capital.
The Securities and Exchange Commission (SEC) has ruled that Meta must allow investors to vote on a shareholder proposal that questions Meta’s ”social license to operate an emerging technology like the metaverse.”
Meta’s attempt to exclude the proposal from the ballot at the upcoming annual shareholders’ meeting was rejected by the SEC. The proposal was filed with the company in December by investment management firm Arjuna Capital, with co-filers Storebrand Asset Management, SHARE, and SumOfUs.
The proposal calls for a third-party assessment of potential psychological, civil and human harms caused by the use and abuse of Meta’s metaverse platform. It also calls for a look into whether these harms are unavoidable risks inherent in the technology, and whether they can otherwise be mitigated or avoided.
“The SEC’s ruling is a win for all those who are deeply troubled by Meta’s appalling track record of dodging accountability and failing to address human and civil rights abuses, as well as privacy concerns affecting billions of people globally,” said Michael Connor, Executive Director of Open MIC, a nonprofit that works with shareholders to encourage corporate accountability in the tech and media industries.
According to Arjuna Capital, Meta tried to use the SEC’s “no-action” process to block the proposal from coming to a vote, arguing that the metaverse project was “ordinary business.”
In a reply filing with the SEC, shareholders pointed out Meta’s “pattern of corporate behavior which entails introducing technology without understanding its impact on people; failing to study the ongoing effects of the technology or studying the effects privately and making decisions that ignore negative user effects; denying any harms caused; apologizing only when harms are proven to have occurred; and failing to implement appropriate remedies for the harms created.”
The SEC informed Meta that the matter “transcends ordinary business matters” as it ruled that the proposal should go forward.
Last year Meta announced a $50 million investment in global research and program partners to build the metaverse responsibly. The company claims that it’s working with experts in government, industry and academia to anticipate risks and opportunities in the metaverse.
In December, Meta’s metaverse platform, Horizon Worlds, faced a sexual harassment issue as a beta user’s avatar was groped by others on the virtual platform. The company later implemented the Virtual Boundary feature which prevents users from invading others’ personal spaces.
Meta’s metaverse division, Reality Labs, reported an operating loss of over $10 billion in 2021.
According to Financial Times, Facebook’s financial arm, Meta Financial Technologies, has plans to introduce virtual tokens for the company’s metaverse. These plans were hinted at when Meta filed a number of trademark applications last month to offer crypto products.
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