The news: EU regulators hit Meta with a $414 million fine Wednesday stemming from a 2018 complaint about its policy that required users to opt-in to personalized advertisements in order to use Facebook and Instagram, in violation of the General Data Protection Regulation (GDPR).
EU fines aren’t anything new for Meta after a costly 2022, but the latest penalty could fundamentally change the tech giant’s European business, and threaten its position in the digital advertising duopoly.
What might change: If the ruling stands, Meta will no longer be able to require users to accept personalized advertising, and its ability to use data like user clicks, video views, and scrolling behaviors to target advertisements would be limited.
The long haul: Meta said it plans to appeal the decision, and a years-long litigation process could follow. But given Meta’s recent track record of hefty fines and failed appeals, its chances don’t look promising.
Our take: Dramatic ad industry shifts don’t happen overnight. This ruling has been a long time coming, and Meta still likely has years to adapt its practices before a final decision—if it wants to. Meta has thrashed in the face of the GDPR’s increasingly tough restrictions, and CEO Mark Zuckerberg may choose to focus on future (but no less risky) endeavors instead.