Mark Zuckerberg is planning to rebrand Facebook

Mark Zuckerberg

Facebook is believed to be preparing to change its corporate name as it battles accusations that its social media sites harm the mental health of younger users.

The rebrand of the American technology company could be revealed as soon as next week and is aimed at drawing a dividing line between its social networking platforms and new projects in augmented reality and “the metaverse”.

The original Facebook app would become just one of a series of products under the parent company’s new banner, according to The Verge, an American technology news website.

Facebook has been under scrutiny in recent weeks, with a whistleblower accusing it of putting its “astronomical profits before people”. In her testimony to the US Congress, Frances Haugen, a former Facebook product manager, accused the company of ignoring internal research showing that a third of third of young women felt more insecure about their bodies when they logged on to Instagram. Facebook denied her allegations.

The corporate shake-up would be one of the most far-reaching since Mark Zuckerberg created Facebook in a Harvard University dorm room in 2004. Since then, it has grown into one of America’s most valuable companies, acquiring Instagram, WhatsApp, Oculus, the maker of virtual reality headsets, and other technology start-ups.

As its power has grown, so too has scrutiny of its governance and Facebook’s role in amplifying social division and its failure to eradicate disinformation from its platforms.

Lawmakers and regulators across the world are pressing for a break-up of Facebook to stimulate competition in digital advertising and increase choice for internet users.

Britain’s competition watchdog fined Facebook £50.5 million this morning over a “deliberate” failure to comply with its demands during an investigation into its takeover of Giphy, a search engine for animated images.

The Competition and Markets Authority (CMA) had ordered Facebook to keep Giphy separate from its other operations while it scrutinised the takeover. However, the regulator found that Facebook had disregarded its legal obligations despite “multiple warnings” and accused it of acting as if it were “above the law”.

Later this week a court in Texas is expected to reveal more details about alleged collusion between Google and Facebook to rig online auctions and thwart competitors. Facebook has previously described the accusations as “baseless”.

Zuckerberg, 37, hopes the rebrand will turn attention away from its scandals and highlight his ambition to turn Facebook into a “metaverse company”, according to the report on The Verge.

The Facebook founder is aiming to replicate his social media dominance in the metaverse — a virtual realm where users can interact without being physically in the same space.

His goal is to create a cyberworld where users can attend concerts, set up shops or work in permanent virtual offices. Facebook is just one of a host of tech companies working on the concept, including Microsoft and Epic Games, the owner of Fortnite.

Facebook already employs more than 10,000 people to develop new gadgets such as augmented reality glasses. Zuckerberg believes the new hardware could be the gateway to the internet for billions of consumers in the future.

This week the company said it would hire 10,000 people in the European Union to help create “metaverse products”.

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Facebook’s new corporate brand is a closely guarded secret within the company, according to The Verge. The company said it does not “comment on rumour or speculation”.

It would not be the first large tech company to rename itself. Six years ago Google created a new corporate structure and rebranded as Alphabet in an attempt to draw attention to its growing ambitions in new areas such as driverless cars and healthcare.

Facebook said it was “considering” its legal options in its dispute with Britain’s competition watchdog.

“We strongly disagree with the CMA’s unfair decision to punish Facebook for a best effort compliance approach, which the CMA itself ultimately approved,” it said. “We will review the CMA’s decision and consider our options.”