An Irish regulator today fined Meta, the parent company of Facebook and Instagram, 390 million euros, ruling that the company forced its users to opt-in to personalized ads in violation of European data protection rules.
Today, the Meta suffered a “major defeat,” according to a New York Times article. This is a “major defeat” that could also significantly undermine the company’s promotional activities – via Facebook and Instagram – in Europe. European Union regulators ruled that Meta was forcing its users to accept personalized ads in violation of European law.
The European ruling, which includes a €390 million ($414 million) fine, could force Meta to make costly changes to its advertising operations in the European Union, one of its biggest markets.
According to the Irish Data Protection Authority (which acts as Meta’s chief regulator in EUsince the company’s European headquarters is in Dublin), EU authorities found that by including legal consent in the terms of service, the company effectively forced users to agree to personalized advertising, in violation of European law (see General Data Protection Regulation – GDPR).
The European regulation does not specify exactly what steps the company must take to comply with it. Meta may start giving its users the ability to choose whether they want their data to be used for such targeted advertising. However, as the New York Times notes, if a large number of users decide not to share their data, Meta will automatically lose a large portion of its advertising revenue.
These practices, for which Meta was fined by European authorities, are said to have contributed to the company generating $118 billion in revenue in 2021. Meta, in turn, announced that it would appeal the European ruling, paving the way for a protracted legal battle. which the NYTimes writes will test both the strength of the GDPR and how aggressively regulators are using the law to force companies to change their business practices.
Adapted from AP, New York Times.