EU seeks to prevent Meta from requiring users to agree to personalised ads – report

European Union privacy regulators have ruled that Meta should not require users to agree to seeing personalised ads based on their online activity, The Wall Street Journal reports, citing “people familiar with the decision”.

According to the WSJ report, a board representing all EU privacy regulators approved a series of decisions on Monday, ruling that EU privacy law doesn’t allow Meta’s platforms, such as Instagram and Facebook, to use their terms of service as a justification for allowing such advertising, the people said.

Meta has allowed users of its services to opt out of personalised ads based on data from other websites and apps for several years, but it has not offered the same option for ads based on data about user activity on its own platforms.

If any significant portion of its users opts out of such targeting, Facebook and Instagram would end up with a reduced pool of consumers to offer to advertisers to target with personalised ads, based on their activity on eta platforms, with significant implication for Facebook’s revenues, the vast majority of which come from advertising.

The boards rulings has not yet been made public, and any decision in favour of allowing users to opt out pf personalised ads is likely to be appealed by Meta. A spokeperson for the company told the WSJ: “This is not the final decision and it is too early to speculate. We’ve engaged fully with the DPC [Ireland’s Data Protection Commission] on their inquiries and will continue to engage with them as they finalize their decision.“

Debra Aho Williamson, Principal Analyst at Insider Intelligence, said that if the EU regulators’ decision is upheld, it would have “a dramatic impact on Meta’s revenue in Europe, kneecapping its ability to use information about its users’ on-platform activities in order to sell targeted advertising.

“Europe had already been the region with Meta’s largest losses in users and revenue,” she continued. “It has been hit hard by Apple’s privacy changes, which limit the amount of information Meta can glean from its users’ off-platform activities. And given a weaker Euro, the company will continue to face strong headwinds in the region. However, we expect Meta to fight vigorously to defend its business, and it could be months, if not years, before any impact is truly felt.”