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 ruling could lead to an AppTrackingTransparency-like (ATT) opt-out system being introduced to Meta’s platforms, giving users the ability to choose how their data is collected. That’d be a tough pill to swallow—ATT opt-in rates sit somewhere between 25% and 45%, per H1 2022 reports from Adjust, AppsFlyer, and InMobi. The Apple policy has cost Meta billions in advertising revenues.
- Meta likely has years before a final resolution, but a change of that magnitude would affect the entire digital advertising industry. Meta will bring in $121.9 billion in digital advertising revenues in 2023, per our forecast, making it the world’s second-largest advertising giant behind Google’s $180.59 billion.
- Stories about the decline of Facebook and Instagram have dominated headlines in the last year, but those platforms are still where the majority of the world’s social media users reside—and thus where advertisers congregate. There will be 2.07 billion global Facebook users and 1.33 billion Instagram users in 2023, per our most recent forecast. In the EU, 45% of internet users will use Instagram this year.