The EU has imposed a $414 million fine on Meta for violating the General Data Protection Regulation (GDPR). This comes from a 2018 complaint about the company’s policy requiring users to opt-in to personalized advertisements in order to use Facebook and Instagram.
This latest fine could have a significant impact on Meta’s European business and its position in the digital advertising market. If the ruling is upheld, Meta will no longer be able to require users to accept personalized advertising and will have limited ability to use data to target advertisements. It could also lead to the introduction of an opt-out system similar to AppTrackingTransparency (ATT) giving users more control over their data.
However, this could also lead to a decline in advertising revenues for Meta. The company is set to generate $121.9 billion in digital advertising revenues in 2023, making it the second-largest advertising giant behind Google.
Despite recent negative press, Facebook and Instagram are still where the majority of social media users and advertisers are, with an estimated 2.07 billion and 1.33 billion users respectively in 2023, particularly in the EU where 45% of internet users will use Instagram this year.
Meta has announced its intention to appeal the decision of the $414 million fine from EU regulators. However, given the company’s history of hefty fines and failed appeals, the outcome is uncertain. In October 2022, Meta lost an appeal in the UK and was ordered to sell off Giphy.
The company also has several other EU fines under appeal, including a $400 million fine for misuse of children’s data and a $275 million fine for multiple data breaches. Google has also had a difficult time, losing multiple billion-dollar appeal processes and facing investigations into anticompetitive practices. It’s important to note that changes in the advertising industry don’t happen overnight.
This ruling has been a long time coming and Meta still has years to adapt its practices before a final decision is reached. CEO Mark Zuckerberg may also choose to focus on other endeavors instead of fighting the restrictions imposed by GDPR.