Meta is facing a new blow to its advertising business after the European data protection regulator appears ready to restrict the social platform’s behavioral advertising system.
After losing billions in advertising revenue to Apple’s anti-tracking option on iPhones, the parent company of Facebook, Instagram and Whatsapp is now facing new limits on a core advertising practice.
The European Data Protection Board (EDPB) has dealt with a complaint that Facebook and Instagram are showing users ads based on their activity on the apps, for which there is no opt-out. In response, Meta has argued that despite the lack of an opt-out option, its terms of service serve as valid consent for the company to serve these personalized ads in this way.
In other words, Meta says this is how it does business and by using the service you accept these terms.
The Irish Data Protection Commissioner had provisionally approved Meta, provoking objections from other European data authorities.
Now the matter has been resolved by the EDPB and the outcome will be published next month.
But while both the EDPB and Ireland’s DPC have declined to comment on the substance of the EDPB’s decision, The Wall Street Journal has reported that the European body has ruled that Meta cannot continue to rely on its “Terms of Service”. to justify personalized behavior ads.
The news hit Meta’s share price hard, as the company saw its public valuation drop 7 percent – or $20 billion – immediately after news of the decision broke.
The matter will now be left to Commissioner Helen Dixon’s office to announce in January as Ireland’s DPC is Meta’s lead regulator.
“The binding decisions address important legal issues arising from the Irish draft decisions [DPC] as the lead supervisory authority for the meta-platforms Facebook, Instagram and WhatsApp,” said a spokesman for the European body.
“The EDPB’s binding decisions play a key role in ensuring the correct and consistent application of the GDPR by national supervisory authorities.”
It’s the final blow in a tough year for Meta.
The company has announced 350 job cuts in Dublin among 11,000 job cuts around the world as it grapples with a slowing online economy and its own business woes.
Meta also faces governance issues, with its own oversight board publicly criticizing the company for being too soft on celebrity and public figure moderation compared to everyone else.
https://www.independent.ie/business/technology/meta-faces-another-blow-to-advertising-revenues-from-eu-42203611.html Meta faces another blow to EU ad revenue