The rapid growth of social media companies has created significant ESG challenges, particularly in the areas of data privacy, content moderation, and corporate governance.
Meta and ByteDance, in particular, have been hit with lawsuits and fines related to data breaches, privacy violations, harmful content affecting minors, labor practices, and antitrust, with regulatory bodies across the US, EU, and Asia increasing scrutiny of their data collection practices.
Let’s dive into some of the key ESG challenges facing the social networking industry.
Let’s dive into some of the key ESG challenges facing the social networking industry.
Meta Platforms Inc.: Privacy Breaches and Regulatory Scrutiny
Meta, the mother company of some of the most used social platforms, Facebook, Instagram, and WhatsApp, has faced numerous ESG challenges over the years, including privacy breaches, data misuse, and content moderation issues. 2025 is off to a rocky start, with the company facing a new lawsuit over personal data usage for targeted ads. In 2024, Meta was fined €251 million for a 2018 data breach and faced fines in South Korea and Nigeria for unlawful data collection and antitrust trials regarding Instagram and WhatsApp. In 2023, it addressed issues related to minors and employee treatment. Previous years included fines over the Cambridge Analytica scandal and minors' privacy violations, highlighting ongoing governance and privacy risks amidst regulatory scrutiny.
Key Controversies:
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- Meta Faces Lawsuits Over Targeted Advertising and Data Use
- EU Fines Meta €251 Million for 2018 Data Breach
- Meta Settles $1.4B Privacy Lawsuit Over Facial Recognition
- Meta Faces Antitrust Trial Over Instagram and WhatsApp Acquisitions
- Meta Fined for Violating Consumer and Data Laws in S.Korea and Nigeria
- Meta Censors Pro-Palestinian Content Amid Global Tensions
- Content Moderators in Kenya Sue Meta Over Working Conditions and 'union-busting'
- Meta Settles $725M Lawsuit Over Cambridge Analytica Privacy Scandal
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ByteDance Ltd (TikTok): National Security Risks and Content Concerns
In recent years, TikTok has faced significant ESG risks as U.S. politicians labeled it a national security threat, leading to data privacy concerns and investigations in the EU. By 2022, it incurred major fines, including a £27 million penalty in the UK for data breaches. In 2023, child safety and harmful content lawsuits increased, prompting government bans on official devices in the U.S., UK, and EU. In 2024, TikTok lost its appeal against a U.S. ban, while countries like Canada and Albania imposed restrictions. A 2025 Supreme Court ruling heightened the risk of a complete ban, highlighting ongoing legal challenges.
Key Controversies:
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- TikTok Faces Lawsuits Over Harmful Content and Security Concerns
- TikTok Hit with Multiple Fines and Investigations Over Privacy Violations
- Bans and Restrictions Over National Security Risks
- TikTok Sued by Parents and States for Impact on Minors' Mental Health
- US Government and Several States Move Toward TikTok Ban
- CEO Faces Congressional Testimony on Security and Privacy Concerns
- TikTok Faces Backlash Over 'Blackout Challenge' and Content for Kids
- Allegations of Discrimination and Toxic Work Culture
- TikTok Fined £27M in UK for Data Protection Breach
X Corp: Hate Speech and Misinformation
Since Elon Musk's acquisition of X (formerly Twitter), the platform has faced major controversies over hate speech and misinformation. Legal issues from the $44 billion buyout and a $150 million settlement for security breaches surfaced in 2022, along with fines in Russia and India. In 2023, X received backlash for hosting anti-Semitic content, leading to advertiser losses and lawsuits. The EU initiated investigations into disinformation, and by 2024, X faced fines in Brazil and Australia, GDPR complaints, and class action lawsuits related to age discrimination and mass layoffs, raising concerns about its online impact.
Key Controversies:
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- X Faces Multiple Lawsuits and Fines for Hate Speech, Misinformation, and Privacy Violations
- X Under Investigation for Disinformation, and Biased Algorithms
- X Hit with Large Fines for Data Violations and Misleading Practices
- US SEC Sues Musk for $150M Twitter Shareholder Fraud
- X Faces Legal Challenges Over Mass Layoffs, Age Bias Claims, and Former Executives Severance Payments
- Global Boycott of X Grows Amid Rising Hate Speech and Toxicity Since Musk’s Acquisition
KakaoTalk: Privacy and Market Manipulation
Kakao has faced moderate ESG risks, notably privacy issues and market behavior controversies. In 2024, the company was fined $11.1 million due to a KakaoTalk data breach. Additionally, in 2023, Kakao faced investigations over market manipulation linked to its SM Entertainment acquisition and experienced security vulnerabilities enabling fraudulent activities. Despite these concerns, Kakao's service outages and monopolistic practice allegations have had less severe impacts compared to industry peers.
Key Controversies:
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- Kakao Faces Privacy Fine Equivalent to $11.1 Million for Data Leak
- Kakao Challenges Record Fine Over Personal Data Breach
- Regulator to review Kakao's acquisition of SM Entertainment
- Kakao Faces Scrutiny Over Fake Business Channels and Security Flaws
- FTC Investigates KakaoTalk's Market Dominance After South Korea Outage
- Hundreds Fall Victim to Major KakaoTalk Pyramid Scheme Scam
RedNote (Xiaohongshu): Censorship and Privacy
REDnote (Xiaohongshu) has fewer ESG issues compared to its peers, facing challenges primarily related to censorship, privacy, and regulatory compliance. In 2025, Texas banned its use on government devices due to security concerns. Earlier, REDnote encountered legal challenges over AI-generated art copyrights (2023), a Taiwan-imposed national security ban (2022), layoffs due to restructuring (2022), and fines by Chinese regulators for inappropriate content involving minors (2021).
Key Controversies:
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- Texas Governor Issues Ban on RedNote for Use on Government Devices
- Xiaohongshu Faces Legal Challenges Over AI-Generated Art and Copyright Infringement
- Taiwan issues ban on Xiaohongshu
- Xiaohongshu's Concerns Amid Censorship and Government Compliance
- China's Xiaohongshu Announces Staff Layoffs
- Xiaohongshu Suspected of Compromising Minors' Privacy
- China Fines Tech Giants Including Xiaohongshu for Spreading Soft Pornography Involving Minors
Conclusion
The social networking industry continues to grapple with significant ESG challenges related to data privacy, harmful content, and corporate governance. Major companies such as Meta, ByteDance, X Corp, KakaoTalk, and REDnote face ongoing regulatory scrutiny, fines, and lawsuits, highlighting persistent ethical concerns. While these issues pressure platforms to improve transparency and governance practices, they also underscore the industry's substantial risks and responsibilities to users and stakeholders.
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