After years of complaints against them and months of speculation about what it could mean for their advertising model, Meta, the parent company of Facebook and Instagram, was hit with fines this week totalling more than $400 million by EU regulators who found the company to be illegally forcing its users to accept targeted, personalized ads.
In addition to levying fines, Ireland’s Data Protection Commission also directed the company to bring its data-processing practices into compliance within 3 months. Meta, as TechCrunch eloquently boils it down, will no longer be able to “rely on a claim of contractual necessity to run behavioral ads — and will instead have to ask users for their consent.”
In a statement about the DPC findings, Meta plans to appeal the rulings as they “strongly believe our approach respects GDPR.” The effects of these penalties are expected to be drastic for both bottom-lines and user experience.
“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,” says The New York Times, who quotes Wedbush Securities analyst Dan Ives as saying the EU judgment could jeopardize 5 to 7 percent of Meta’s overall ad revenue.
What that means for U.S. users will come into crisper focus as Meta responds in Europe. While the United States does not have the same privacy regulations as the EU, changes could still take place. “Many tech companies,” the The New York Times points out, “apply EU rules globally because that is easier to put in effect than limiting them to Europe.”