Facebook’s parent organisation Meta should not require users through its terms of service to agree to personalised advertisements based on their online activity, European Union privacy regulators have ruled.
The ruling was first reported on by The Wall Street Journal.
Targeted advertising, which is Meta’s core business and helps the tech conglomerate to generate billions of dollars in annual revenue, has long been facing regulatory scrutiny around the world. Meta allows users to opt out of ads they do not want to see on their timelines, but it actively harvests data from their online activity across its social media applications (Facebook and Instagram) to build profiles for targeted advertising.
The decision was issued by the European Data Protection Board (EDPB) earlier this week. According to sources, the Irish Data Protection Commission (DPC) has been given a month to issue a ruling on the same as Meta has its European headquarters located in Dublin, Ireland. Other sources have claimed the Irish watchdog is likely to impose fines on Meta on the EDPB’s directives. The EU’s General Data Protection Regulation (GDPR) bars companies from forcing consumers into providing their personal information to avail their services.
The EU decision can be appealed, but, if upheld, the new restrictions could significantly impede Meta’s lucrative advertisement business based entirely on user preferences.
The case was filed following a complaint by Austrian digital activist Max Schrems in 2018.
“Instead of having a yes/no option for personalised ads, they just moved the consent clause in the terms and conditions,” said Schrems in a statement. “This is not just unfair but clearly illegal. We are not aware of any other company that has tried to ignore the GDPR in such an arrogant way.”
According to Schrems, Meta, in light of the EDPB’s ruling, is required to allow users a version of all its social networking apps that do not gather personal information for targeted ads. The social media giant, however, would still be allowed to obtain explicit consent from the user to personalise the ads.
“This is not the final decision and it is too early to speculate,” a Meta spokesperson said. “We’ve engaged fully with the DPC on their inquiries and will continue to engage with them as they finalize their decision.“
The DPC declined to share details of the decision.
“The DPC cannot comment on the contents of the decisions at this point. We have one month to adopt the EDPB’s binding decisions and will publish details then.”
The past two years have been a troubling period for a powerful tech conglomerate like Meta, which once ruled the social media realm with monumental revenues and enormous influence over foreign markets. However, with billions of dollars being poured into CEO Mark Zuckerberg’s ambitious project, Metaverse (reportedly worth $100 billion), massive layouts, hard-hitting slumps in revenues, and tough competition from the hugely successful short-video platform TikTok, Meta faces uncertainty over its future prospects and concerns whether the company will be able to regain its influential position in the market. In less than two years, the company has been fined almost $1 billion by the Irish regulators over multiple failures to protect user privacy.
