2023 may be tough for Meta, as EU regulator bans targeted advertisements
Meta was fined for showing ads to Facebook and Instagram users based on their online behaviour
The European Union privacy regulator announced a ruling that fined Meta (Facebook parent company and owner of Instagram) with 390 million euros ($411 million) for violating EU privacy laws by sending targeted advertisements to Facebook and Instagram users based on their online activity.
The accusation was made by the Irish Data Protection Commission and it has been backed by all EU privacy regulators, however, company representatives have noted that they plan to appeal the ruling. According to the ruling, the platforms have to present users with the option to opt out of targeted advertisements, thus seriously damaging their revenue streams.
The debated advertising practice relies on Meta collecting information on its users behaviour on its platforms and selling this information to advertisers, who, in exchange, use it for creating ever more sophisticated and tailored ads. Analysts have estimated that the new ruling could result in up to a 20% revenue reduction for the social media giant.
This is yet another shock to Meta’s business revenue model, as in 2021 Apple began specifically asking iPhone customers if they want to prevent apps from tracking their online activity.
Rumour has it that the company has been attempting to circumvent Apple’s policy by collecting data from built-in Facebook or Instagram browsers that open when a user clicks on a specific site’s Facebook or Instagram page, however, it hasn’t been possible to prove these accusations yet.
