Meta Platforms, the parent company of Facebook, will soon only be allowed to show personalized advertisements if users have permitted to use their data.
The European privacy regulator EDPB has determined this in a still personal decision, Reuters news agency reports based on an insider. This seems to be another significant blow to the revenue model of the American social media company.
The case started a few years ago with a complaint from Austrian privacy activist Maximilian Schrems about Facebook Ireland, the company’s European headquarters. Schrems had complained to the Irish data protection authority about the transfer of personal data by Facebook Ireland to its parent company in the US. He says users should be given the choice of whether or not the company can use their data for advertising purposes rather than being asked to agree to a list of terms and conditions.
Meta itself does not want to comment substantively. According to a spokesman, the company is still in talks with the Irish authorities. In turn, a spokeswoman for the EDPB declined to provide details of the decisions taken. However, she did say that the European watchdog has taken action because national regulators in Europe disagreed with how Ireland authorities dealt with the issue.
Investors reacted with shock to the New York stock exchange. The Meta shares lost almost 7 percent in value on Tuesday. A privacy expert from British law firm Addleshaw Goddard explains that CEO Mark Zuckerberg’s company may have to change its advertising policy. That can be quite a challenge, according to the expert. Meta could still appeal the decision, which will likely be implemented within a month.