LONDON : Meta suffered a major defeat Wednesday that could severely undercut its Facebook and Instagram advertising business after EU regulators found it had illegally forced users to effectively accept personalised ads. The decision, including a fine of 390 million euros ($414 million), has the potential to require Meta to make costly changes to its advertising-based business in the EU. The ruling is one of the most consequential judgments since the 27-nation blocenacted a landmark data privacy law aimed at restricting the ability of Facebook and other companies from collecting information about users without their prior consent. The law took effect in2018.
The case hinges on how Meta receives legal permission from users to collect their data for personalised advertising. The company includes language in its terms of service agreement, the very lengthy statement that users must accept before accessing services like Facebook, Instagram and WhatsApp, that effectively means users must allow their data to be used for personalized ads or stop using Meta’s social media services altogether. Ireland’s data privacy board, which serves as Meta’s main regulator in the EU, said EU authorities determined that placing the legal consent within the terms of service essentially forced users to accept personalised ads, violating the European law known as the General Data Protection Regulation, or GDPR.
Meta has three months to outline how it will comply with the ruling. The decision does not specify what the company must do, but it could result in Meta allowing users to choose whether they want their data used for such targeted promotions. If a large number of users choose not to share their data, it would cut off one of the most valuable parts of Meta’s business. Wednesday’s announcement relates to two complaints filed against Meta in 2018. Meta said it will appeal the decision. “We strongly believe our approach respects GDPR, and we’re therefore disappointed by these decisions,” Facebook said in a statement.