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A pedestrian walks in front of a new logo and the name ‘Meta’ on the sign in front of Facebook headquarters on October 28, 2021 in Menlo Park, California.
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With its name change to Meta, the company formerly known as Facebook is trying to eliminate what some employees have called a “brand tax” on apps like Instagram, Messenger and WhatsApp.

Meta CEO Mark Zuckerberg announced the rebranding on Thursday, following a brutal seven weeks of document dumps that showed Facebook knew of the harm its products cause and has refused to address them. But the brand tax dates as far back as the 2016 presidential election, when Facebook turned into a haven of hateful content and misinformation.

Facebook’s other services, most notably Instagram and Messenger, have struggled to distance themselves from the constant embarrassment that’s plagued their parent company over the past half-decade, according to people with knowledge of the matter.

Brand separation became particularly difficult in 2019, when Facebook announced it would tag all of its services with Facebook at the end of their names. Messenger became Messenger from Facebook, and the other apps turned into Instagram from Facebook and WhatsApp from Facebook.

Facebook said at the time that the rebranding was intended to provide clarity to users. The same was true for its Oculus virtual reality unit and business software offering Workplace, which also got the “from Facebook” label.

“This brand change is a way to better communicate our ownership structure to the people and businesses who use our services to connect, share, build community and grow their audiences,” the company said in a press release on Nov. 4, 2019.

But behind closed doors, Facebook wasn’t expressing concern about consumer confusion. Rather, the company was trying to restore the strength of its name after a series of public relations setbacks, most notably the Cambridge Analytica data hijacking scandal in 2018, several former employees told CNBC.

Facebook’s own brand was in the dumps. Zuckerberg decided to consolidate the branding because he thought associating Facebook with the company’s less-sullied services would help, said the former employees, who asked not to be named because the information was confidential. 

With an image of himself on a screen in the background, Facebook co-founder and CEO Mark Zuckerberg testifies before the House Financial Services Committee in the Rayburn House Office Building on Capitol Hill October 23, 2019 in Washington, DC.
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Some employees advised Zuckerberg to follow the path taken by Google, which created the parent company name Alphabet in 2015, rather than attaching Facebook to everything, sources said.

Zuckerberg’s decision to instead showcase Facebook was not driven by data. On the contrary, he was presented with research showing that associating any of the company’s products with the Facebook brand caused trust to drop, said one former executive.

Another employee said that was seen in research done for Facebook’s video-calling device, Portal, announced in 2018. Data indicated that putting the name Facebook on it would reduce public trust. The company went with the name Facebook Portal anyway.

When asked for a comment for this story, a spokeswoman for the company directed CNBC to a Thursday post from Meta Chief Marketing Officer Alex Schultz.

“In 2019, we rolled out new branding that linked together all of our products, but still kept the Facebook name for both the company and our original app,” Schultz wrote. “But over time it was clear that the shared Facebook name could cause confusion, not only with people using products such as WhatsApp or Instagram, but also with constituencies we work with. Helping people have clarity when something is coming from the company versus the Facebook app is an important reason for this change.”

Instagram hurt the most

Instagram was hit particularly hard by the 2019 rebranding.

The photo app is used mostly by teens and young people, who have long had a negative view of Facebook. The “big blue app,” as Facebook is known, was seen as the place where parents and weird uncles go to share stories and comment on their relatives’ posts.

Instagram’s marketing employees began seeing, through quarterly brand tracking results, that the new label was causing harm.

They tried to make the “from Facebook” font smaller, not use it at all or play with the colors in a way that would hide the Facebook name, ex-employees said. Ultimately, they were overruled, according to one former employee.

Zuckerberg insisted that Facebook had turned Instagram into a screaming success since acquiring it for $1 billion in 2012, and it was time for Instagram to give back, a former executive recalled. 

Instagram marketers would eventually be measured by how well they tied the brands together. It was mandated by Zuckerberg and non-negotiable.

Messenger, by contrast, was given permission to create some sense of separation, according to multiple employees. 

Unlike Instagram, Oculus and WhatsApp, which were all acquired, Messenger was homegrown. Facebook turned it into a separate app in 2014. To attract younger users, Messenger was given the “blessing” a year ago to take some steps to improve the brand, two former employees said.

Messenger rolled out a new logo last year with a gradient color, predominantly purple, similar to Instagram’s logo. It was part of the Messenger team’s effort to position the app for Millennials and Gen Z users, who have been flocking to other services like TikTok.

Removing the Facebook name

As Meta, there’s no guarantee that Facebook’s brand tax dissipates.

But Zuckerberg has at least changed his approach, less than two years after adding “from Facebook” to all of his company’s main services.

The company has already started rebranding several of its units. The hardware division, previously known as Facebook Reality Labs, will now be called Reality Labs. The payments division, which was known as F2 (Facebook Financial), will now be Novi, the name of the company’s cryptocurrency wallet product. 

Zuckerberg remains defiant following a series of document leaks by ex-employee Frances Haugen, the whistleblower, and the many stories that followed from the Wall Street Journal and other publications. One of the most notable stories showed that the company knew Instagram was detrimental to teenagers’ mental health and was doing little about it. 

“My view is that what we are seeing is a coordinated effort to selectively use leaked documents to paint a false picture of our company,” Zuckerberg said after the company’s quarterly earnings report earlier this week.

Some of the documents released showed that the number of teenage users of the Facebook app in the U.S. has declined by 13% since 2019, with a projected drop of 45% over the next two years, according to The Verge. Additionally, Facebook researchers found that the company was not expecting people born after 2000 to join the social network until they were 24 or 25 years old, if they ever joined, Bloomberg reported.

Facebook addressed that issue on Monday in its earnings report. The company said it would begin pivoting both Instagram and Facebook to feature more videos from the Reels product in an effort to attract young users.

Zuckerberg said the company will try to make all of its services appealing to young adults, but he acknowledged that “this shift will take years, not months, to fully execute.”

Moving away from the Facebook brand is the first big step.

WATCH: The metaverse is things you can do with goggles strapped to your face

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Amazon to invest another $4 billion in Anthropic, OpenAI’s biggest rival

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Amazon to invest another  billion in Anthropic, OpenAI's biggest rival

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Amazon on Friday announced it would invest an additional $4 billion in Anthropic, the artificial intelligence startup founded by ex-OpenAI research executives.

The new funding brings the tech giant’s total investment to $8 billion, though Amazon will retain its position as a minority investor, according to Anthropic, the San Francisco-based company behind the Claude chatbot and AI model.

Amazon Web Services will also become Anthropic’s “primary cloud and training partner,” according to a blog post. From now on, Anthropic will use AWS Trainium and Inferentia chips to train and deploy its largest AI models.

Anthropic is the company behind Claude — one of the chatbots that, like OpenAI’s ChatGPT and Google’s Gemini, has exploded in popularity. Startups like Anthropic and OpenAI, alongside tech giants such as GoogleAmazonMicrosoft and Meta, are all part of a generative AI arms race to ensure they don’t fall behind in a market predicted to top $1 trillion in revenue within a decade. Some, like Microsoft and Amazon, are backing generative AI startups with hefty investments as well as working on in-house generative AI.

The partnership announced Friday will also allow AWS customers “early access” to an Anthropic feature: the ability for an AWS customer to do fine-tuning with their own data on Anthropic’s Claude. It’s a unique benefit for AWS customers, according to a company blog post.

In March, Amazon’s $2.75 billion investment in Anthropic was the company’s largest outside investment in its three-decade history. The companies announced an initial $1.25 billion investment in September 2023.

Amazon does not have a seat on Anthropic’s board.

News of Amazon’s additional investment comes one month after Anthropic announced a significant milestone for the company: AI agents that can use a computer to complete complex tasks like a human would.

Anthropic’s new Computer Use capability, part of its two newest AI models, allows its tech to interpret what’s on a computer screen, select buttons, enter text, navigate websites and execute tasks through any software and real-time internet browsing.

The tool can “use computers in basically the same way that we do,” Jared Kaplan, Anthropic’s chief science officer, told CNBC in an interview last month, adding it can do tasks with “tens or even hundreds of steps.”

Amazon had early access to the tool, Anthropic told CNBC at the time, and early customers and beta testers included Asana, Canva and Notion. The company had been working on the tool since early this year, according to Kaplan.

In September, Anthropic rolled out Claude Enterprise, its biggest new product since its chatbot’s debut, designed for businesses looking to integrate Anthropic’s AI. In June, the company debuted its more powerful AI model, Claude 3.5 Sonnet, and in May, it rolled out its “Team” plan for smaller businesses.

Last year, Google committed to invest $2 billion in Anthropic, after previously confirming it had taken a 10% stake in the startup alongside a large cloud contract between the two companies.

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Apple and Google could face a competition probe over their huge mobile ecosystems in the UK

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Apple and Google could face a competition probe over their huge mobile ecosystems in the UK

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LONDON — Apple and Google could face a competition investigation into their dominance of mobile web browsers and apps in the U.K.

The U.K.’s Competition and Markets Authority issued a report Friday with a provisional decision from an independent inquiry group tasked by the regulator with carrying out an in-depth review of the mobile browser markets.

In the report, the group recommended that the CMA investigates Apple and Google’s activities in mobile ecosystems under the new Digital Markets, Competition and Consumers Act (DMCC), a new U.K. law coming into force next year which seeks to prevent anti-competitive behavior in digital markets.

The DMCC is akin to the Digital Markets Act in the European Union. It gives the CMA the ability to designate firms as having “Strategic Market Status” (SMS) — which means they have a significant amount of market power in a certain digital business.

Under the rules, the CMA can impose major behavioral changes on firms that have SMS status, including ending “self-preferencing” of their own services, requiring interoperability — essentially allowing one piece of software to work with another smoothly — and banning anti-competitive behavior.

The CMA is required to undertake a formal investigation to give a firm SMS status.

For Apple specifically, the CMA inquiry group said it was concerned the tech giant’s App Store rules “restrict other competitors from being able to deliver new, innovative features that could benefit consumers” — for example, faster webpage loading on iPhone apps.

It added many smaller U.K. developers said they would like to use “progressive” web apps — which allow firms to offer apps outside of an app store — but that this technology “is not able to fully take off on iOS devices.”

The group also said it found a revenue-sharing agreement between Google and Apple to make Google the default search engine on iPhone “significantly reduces their financial incentives to compete in mobile browsers on iOS.”

“Markets work best when rival businesses are able to develop and bring innovative options to consumers,” Margot Daly, chair of the CMA’s independent inquiry group, said in a statement, adding that “competition between different mobile browsers is not working well and this is holding back innovation in the U.K.”

Apple said in a statement that it disagreed with the findings of the report and that it was concerned market interventions imposed under the DMCC “would undermine user privacy and hinder our ability to make the kind of technology that sets Apple apart.”

 “Apple believes in thriving and dynamic markets where innovation can flourish. We face competition in every segment and jurisdiction where we operate, and our focus is always the trust of our users” an Apple spokesperson told CNBC via email.

Google was not immediately available for comment when contacted by CNBC.

The CMA group had also looked into restrictions on the distribution of gaming services on Apple’s mobile app distribution platform. However, it’s now decided to drop this element of the investigation following a decision by the U.S. tech giant to allow cloud gaming services on App Store.

The regulator said interested parties have until Dec. 13 to share comments on its provisional findings. It expects to make a final decision in March 2025.

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Indonesia wants Apple to sweeten its $100 million proposal as tech giant lobbies for iPhone 16 sales

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Indonesia wants Apple to sweeten its 0 million proposal as tech giant lobbies for iPhone 16 sales

An iPhone 16 signage is seen on the window at the Fifth Avenue Apple Store on new products launch day on September 20, 2024 in New York City. 

Michael M. Santiago | Getty Images News | Getty Images

The Indonesian government expects Apple to increase its proposed $100 million investment into the country, according to state media, as the iPhone maker seeks clearance from Jakarta to sell its latest phones.

The American tech giant’s latest smartphone model doesn’t meet Indonesia’s 40% domestic content requirements for smartphones and tablets and hasn’t been granted clearance to be sold in the country. 

The purpose of the ban is to protect local industry and jobs, with officials asking Apple to increase its investments and commitments to the economy in order to gain greater access. 

According to a report from Indonesian state media, the country’s Ministry of Industry met with representatives from Apple on Thursday regarding its proposal to invest $100 million over two years. 

The funds would go toward a research and development center program and professional development academy in the country, as per the report.

The company also plans to produce accessory product components, specifically mesh for Apple’s AirPods Max, starting in July 2025, it added.

Apple didn’t immediately respond to a request for comment from CNBC.

While the new offer is 10 times larger than a proposal that was reported earlier, the government is still striving to sweeten the deal to get a “fair” commitment.

“From the government’s perspective, of course, we want this investment to be larger,” industry ministry spokesperson Febri Hendri Antoni Arif told state media on Thursday.

He said that a larger investment would help the development of Indonesia’s manufacturing sector, adding that its domestic industry was capable of supporting production of Apple devices such as chargers and accessories.

While Indonesia represents a small market for Apple, it also offers growth opportunities as it has the world’s fourth-largest population, according to Le Xuan Chiew, a Canalys analyst focusing on Apple strategy research.

“Its young, tech-savvy population with growing digital literacy aligns with Apple’s strategy to expand [global sales],” he said, noting that it also offers potential for manufacturing and assembly that supports Apple’s efforts to diversify its supply chain. 

Success in this market requires a long-term approach, and Apple’s investment offer demonstrates a commitment to complying with local regulations and paving the way for future growth, he added.

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