Facebook parent Meta may be prohibited from using personal data for advertising, after EU ruling and Irish fine
Facebook parent Meta Platforms is facing another potential body blow to its business model, after a fine from the Irish data protection regulator.
The €390m (£343m) total fine from Ireland’s Data Protection Commission (DPC) came after a EU ruling that its legal justification for targeting users with personalised ads broke EU data laws.
There is concern that the move could force Meta to ask users to “opt in” to having their data used for targeted ads.
Ireland’s Data Protection Commission (DPC) announced on Wednesday the conclusion of two inquiries into the data processing operations of Meta Platforms Ireland Limited in connection with the delivery of its Facebook and Instagram services.
Final decisions have now been made by the DPC in which it has fined Meta Ireland €210 million (for breaches of the GDPR relating to its Facebook service), and €180 million (for breaches in relation to its Instagram service), it stated.
Meta Ireland has also been directed to bring its data processing operations into compliance within a period of 3 months.
The DPC rejected Meta’s argument that users agree to receive ads based on their personal data when they enter into a “contract” with its social media platforms via the terms and conditions they sign, the Guardian reported.
A core part of the Facebook and Instagram business model is compiling profiles of users from their online activity, which enables advertisers to target people based on details such as their hobbies, consumer behaviour and location, it noted.
The DPC had initially backed Meta’s legal argument that the “contract” approach did not breach the EU’s general data protection regulation (GDPR).
But on Wednesday it said it had to follow the binding recommendations of the European Data Protection Board, which is comprised of all EU privacy regulators.
Meta said in a statement it would appeal against the decision and that it was “incorrect” that personalised ads could no longer be offered without users’ consent following the DPC announcement.
“These decisions do not prevent targeted or personalised advertising on our platform,” Meta was quoted as saying by the Guardian.
“The decisions relate only to which legal basis Meta uses when offering certain advertising. Advertisers can continue to use our platforms to reach potential customers, grow their business and create new markets,” Meta reportedly said.
Financially, things are tough for the platform.
Meta’s net income fell to $6.69bn (£5.5bn) for the April-June period, down 36 percent from $10.39bn for the same period a year earlier, its first-ever revenue decline.
Then in its third quarter results Meta’s share price had plummeted after it forecast that it would lose $10bn in ad revenue over full-year 2022 due to privacy changes by Apple that allow iPhone users to opt out of ad tracking across apps.
And Meta is also dealing with other setbacks and financial penalties as well.
In November Ireland’s data protection office fined Facebook parent Meta some 265 million euros (£228m) for failing to secure the data of hundreds of millions of users from being published online.
That fine follows a fine of 405m euros the Irish Data Protection Commission (DPC) levied in September for Meta’s handling of young users’ privacy settings on Instagram, and means Meta has been fined nearly 1bn euros by EU regulatory bodies in the past 18 months.
The fines follow a DPC probe that began in April 2021 into the publication of data on 533 million Facebook users from 106 countries, which appeared on a hacking forum in 2020.
Then in December 2022 Meta agreed to pay $725 million (£600m) to settle a long-running class action lawsuit in the US that alleged the firm illegally shared users’ data with Cambridge Analytica.
And last October the UK’s Competition Markets Authority (CMA) ordered Meta to divest itself of Giphy.
Meta said it would comply with the British regulators ruling.
Meta is also struggling to convince investors about its multibillion-dollar investment in the metaverse, a concept where the physical and digital worlds combine via virtual and augmented reality.