Report: Meta's Targeted Ad Model to Face EU Restrictions

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Facts

  • EU privacy regulators on Monday reportedly ruled that Meta Platforms Inc, which includes Facebook and Instagram, can't require users to agree to personalized ads targeting their online activity.1
  • The ruling calls on Ireland's Data Protection Commission, Meta's EU regulator, to issue public orders and fines reflecting the decision. Meta can appeal the ruling, but if upheld, it would serve a blow to the company's lucrative advertising business.2
  • The news comes after Apple Inc last year required iPhone app developers to have user consent to track data, resulting in Meta's 2021 revenue declining 8%. If implemented, the EU ruling would now require Meta to seek consent from users for targeted ads.3
  • The decision is linked to the EU's General Data Protection Regulation (GDPR), which took effect in 2018 and requires Meta to provide a version of all apps that don't use personal data for ads, while allowing it to use non-personal data for ads or to ask users for consent.4
  • The GDPR requires companies to show contractual necessity, prohibiting them from requiring users to turn over personal data except when necessary for the business, such as a delivery app requiring your home address.3
  • Though a Meta spokesperson said the GDPR still 'allows for a range of legal bases under which data can be processed, beyond consent or performance of a contract,' this won't be the first time they've faced EU scrutiny, having received a Facebook-related fine of $275M in November and a $400M Instagram-related fine in September.2

Sources: 1Al Jazeera, 2Cnet, 3Wall Street Journal and 4Euronews.

Narratives

  • Narrative A, as provided by Silverpush. The online world is desperately searching for better methods of advertising than personalized targeted ads, which is why the EU is clamping down on Big Tech's cookies-based system. If Meta wants to place a running shoe ad on a marathon website, that's fine, but collecting and tracking our every click is immoral and should be abolished by laws like this. This is a move in the right direction for privacy protection.
  • Narrative B, as provided by Center for data innovation. While this may seem like an altruistic effort on behalf of European social media users and against Big Tech, there's money being made on the other side, too. Companies that rely on contextual advertising rather than targeted ads have spent millions of dollars lobbying the EU to pass this legislation. These companies are engaged in the same selfish lobbying they accuse Big Tech of doing.