Meta Loses Bid to Quash Vote on the Future of Metaverse

By Jeff Green & Saijel Kishan, April 7, 2022 - Meta Platforms Inc. will face a shareholder mandate on whether its planned metaverse virtual world is good for society.

The U.S. Securities and Exchange Commission rejected a request by Meta to quash a proposal from Arjuna Capital LLC asking for a third-party evaluation of the potential psychological, civil and human rights harms of the metaverse. Arjuna wants the company to demonstrate whether any harms could be mitigated or avoided or whether they are simply inherent to the technology. The proposal will now be included in the upcoming list of issues shareholders will vote on at the annual general meeting.

While Meta acknowledges there are risks from the creation of virtual worlds, it argued that the proposal shouldn’t go for a vote because it involved matters related to the company’s “ordinary business operations” which are excluded from shareholder votes. The SEC ruled that the proposal “transcends ordinary business matters.” The proposal, which is unlikely to pass because Chief Executive Officer Mark Zuckerberg controls the voting shares, will come to shareholders later this year.

“Yes, Zuckerberg is emperor at Facebook, but they are facing a lot of headwinds, so it’s not written in stone that Meta will continue in this form forever,” Natasha Lamb, a managing partner at Arjuna Capital, said in an interview. “They are pumping $10 billion a year into a new project when it’s quite obvious they can’t handle their current platform.”

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