E.U. Law Rules Meta’s Ad Practices Illegal

Meta suffered a major defeat on Jan 4 that could severely undercut its Facebook and Instagram advertising business after European Union regulators found it had illegally forced users to effectively accept personalized ads.

European Union regulators Jan 4 found Meta had illegally forced users to effectively accept personalized ads. The finding could severely threaten its Facebook and Instagram advertising business.

The decision, and fine of 390 million euros or $414 million, could require Meta to make costly changes to its ad-based business in the European Union, which is one of its largest markets.

In one of the most consequential judgments made in the EU, with a population of about 450 million people, this ruling enacted a landmark data-privacy law which restricts the ability of Facebook and other companies from collecting information about users without their prior consent. The law took effect in 2018.

The case depends upon how Meta receives legal permission from users to collect their data for personalized advertising. The company’s terms-of-service agreement includes language that effectively means users must either allow their data to be used for personalized ads or stop using Meta’s social media services altogether.

The decision does not specify what the company must do. Meta has three months to put forward how it will comply with the ruling.