EU Commission said the changes made by Meta to its November 2024 model are limited and that if it fails to meet the DMA it could face daily fines from June 27, 2025
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EU Commission warned that Meta could face daily fines if the limited changes it has proposed do not meet the requirements of DMA.
“The Commission cannot confirm at this stage if these are sufficient to comply with the main parameters of compliance outlined in its non-compliance Decision,” a spokesperson said.
“With this in mind, we will consider the next steps, including recalling that continuous non-compliance could entail the application of periodic penalty payments running as of 27 June 2025, as indicated in the non-compliance decision.”
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Meta accused the commission of always changing the goalpost and discriminating against the company, pointing out that the changes they have made comply with the EU rules.
Assessment
Meta said in its Q1 2025 earnings that the changes being championed by the EU Commission will change how they deploy ad-targeting to EU users, significantly impacting earnings from Q3 2025. The statement by the EU Commission signals that they may reject the changes made by Meta in November 2024, making the company to launch a model with no ads so as to comply with the EU rules. I estimated that such severe changes could lead to a $3.8 billion revenue headwind in 2025. Given Meta’s core team execution speed (as seen during Apple ATT) and benefits of AI (e.g. the recently announced ad creation tools), I still think that this is a temporary headwind for Meta.