An EU Court of Justice has ruled that Meta must get user consent before sending personalized ads in certain circumstances.
Following a recent ruling that fined it $425 million and is under appeal, Meta started using a EU law provision that cites “legitimate interest” of its business.
Today’s rulling states that users interest overrides that “legitimate interest”.
As such, the ruling will compel the likes of Facebook to ask users to opt in to ads that are of interest to them rather than the company displaying any ads and asking users to click “yes”.
Today’s rulling is not appealable.
Meta spokesperson said that the company is evaluating the court’s ruling and that it will comment further in due course.
The EU and US have signed a new transatlantic deal that will allow transfer of user data to U.S, without causing any safety concerns.
The transatlantic deal created concerns for tech giants such as Meta.
During the latest earnings, Meta warned that if an agreement on the transatlantic EU-US data transfer doen’t materialize, it will be forced to stop offering its services in Europe.
Roughly 10% of its worldwide ad revenue comes from ads delivered to Facebook users in EU countries.
Norway’s data protection authority, Datatilsynet, said it will fine Meta $100,000 per day over data breaches unless it takes action aimed at resolving it.
The fine will run from Aug. 4 to Nov. 3.
Meta said it will review the decision while adding that no immediate impact on its services is expected.
Norway is not a member of the EU but is part of the European single market.
Meta has said that it will seek user consent before allowing businesses to send targeted ads to them.
“Today, we are announcing our intention to change the legal basis that we use to process certain data for behavioural advertising for people in the EU, EEA (European Economic Area) and Switzerland from ‘Legitimate Interests’ to ‘Consent’,” Meta said in a blog post.
It added that the change will not cause any immediate impact to its services in the region.
“There is no immediate impact to our services in the region. Once this change is in place, advertisers will still be able to run personalised advertising campaigns to reach potential customers and grow their businesses. We have factored this change into our business outlook,” it said.
Meta is considering a paid version of Facebook and Instagram with no ads on top of the free version in Europe in order to combat privacy regulations, that’s according to the New York Times.
The New York Times did not indicate how much the new version will cost.
Meta has not responded to a request for a comment.
Meta losses a Norwegian appeal case that sought to stop a fine of $93,200 per day starting from August 4 to November 3 for collecting user data and using it in its targetted advertising.
The rulling could have wider implications in europe as Datatilsynet, Norwey’s data regulator, plans to refer it to the EU data regulator.
“We are disappointed by today’s decision and will now consider our next steps,” a Meta spokesperson told Reuters.
The European data protection regulators have approved a Europe-wide ban on the use of personal data of Facebook and Instagram users for targetted advertising.
Greet Gysen, spokeswoman for the European Data Protection Board told Bloomberg that the Ireland’s Data Protection Commission now has two weeks to “impose a ban on the processing of personal data for behavioral advertising on the legal bases of contract and legitimate interest.”
Meta said in a statement that the EDPB has been aware of its subscription model for weeks and that they have been engaged with them to arrive at mutually beneficial agreement but the ban “unjustifiably ignores that careful and robust regulatory process.”
Ireland’s Data Protection Commission said its main focus now is to conclude “its detailed assessment of the consent-model.”
The ban extends that imposed by Norway on Meta Pltaforms in November.
Assesment;
EDPB’s decisions are binding but can be appealed. Given that EDPB was already aware of Meta’s subscription plan that would possibly address the consent issue, I believe that this decision may contain a statement that would give Ireland’s Data Protection Commission(DPC) the authority to remove the ban. Also, if the subcription plan meets the authority’s objectives, Meta may use it to appeal the decision. Until we have the full report from EDPB or DPC, it’s hard to give a concrete assessment of the situation. I will work on assessing the matter and update this post with my new assessment and additional context.
The binding decision is based on legal bases contract and legitimate interest, which Meta plans to no longer rely on. That means the risk lies on the subscription model. If the DPC accepts the subscription model within two weeks, it will be positive for Meta. Otherwise, Meta’s use of personal data for behavioural advertising will come to a standstill, or else, it risks a fine of 4% on its global turnover. Like in the past decisions, Meta could appeal the ban though, giving them time to lobby for the subscription model.
“The EDPB takes note of Meta’s proposal to rely on a consent based approach as legal basis, as it was reported on 30/10. The Irish DPC is currently evaluating this together with the Concerned Supervisory Authorities (CSAs),” the statement reads.
“The EDPB decision relates to legal bases [that] Meta no longer intends to rely on, following findings of the DPC that reliance on these bases did not demonstrate compliance with GDPR,” Graham Doyle, Deputy Commissioner at the Irish DPC, said.
“Since we now will get a permanent ban, non-compliance with the EU/EEA-wide ban would in itself be a violation of the GDPR, which could be sanctioned with up to 4% of global turnover,” Tobias Judin, the head of Datatilsynet’s international section, told Reuters.
“By offering an advertising-free subscription service, Meta can satisfy the European Union’s GDPR “consent basis” for collecting data in a likely revenue-neutral manner given the company plans to continue offering its core ad-supported service to most E.U. users,” Citi analyst Ronald Josey said yesterday.
A U.S. federal judge ruled against Meta Platforms in a privacy dispute with the FTC.
Meta Platforms wanted the District Court to take over its dispute with the FTC.
In May, the FTC accused Meta of misleading parents on how much control they have over their kids’ usage of the Messenger Kids app and proposed to tighten the $5 billion settlement it reached with the company in 2019 to prevent Meta from making money off data it collects from the underage users, including from the virtual reality business.
The ruling grants the FTC the right to implement the proposed changes.
“We are considering our legal options in light of the Court’s ruling and will continue to vigorously fight the FTC’s unlawful attempt unilaterally to rewrite our agreement,” Meta Platforms spokesman said.
Meta’s Italian tax case has been referred to the EU Commission’s VAT committee for evaluation, Reuters reported citing three sources familiar with the matter.
Meta faces a potential tax bill of around $954 million in Italy.
The case relates to imposing VAT on online services provided by Meta.
Though the commission’s assessment is non-binding, if it decides that the tax is applicable in Italy, other EU countries can impose it since taxes are harmonised at the European level.
I=1
Turkey’s competition authority said it will fine Meta Platforms $160,000 per day for failing to provide enough documentation in relation to its 2022 online video advertising market investigation.
A group of 28 organisations including the privacy activist Max Schrems’ advocacy group NOYB, the Irish Council for Civil Liberties and Wikimedia Europe wrote to the European Data Protection Board (EDPB) opposing Meta’s paid no-ads subscription model.
The EDPB is expected to issue guidance on the subscription model in the coming weeks.
Eight consumer groups from Czech Republic, Denmark, France, Greece, Norway, Slovakia, Slovenia and Spain have asked the watchdogs to act against Meta for alllegedly breaching the privacy rules.
They have also criticised Meta’s new ad-free subscription model.
“The present request for information builds on Meta’s previous replies and asks additional information concerning the methodology underlying Meta’s risk assessment and mitigation measures reports, the protection of minors, elections and manipulated media”, the EU Commission said in a statement.
A U.S court ruled that Meta Platforms cannot stop FTC from reopening a probe into Facebook unit’s privacy practices for now.
Meta already paid a $5 billion fine in a 2020 privacy settlement but the FTC wants to tighten it to prevent profiting from minors’ data and expand curbs on facial recognition technology.
Meta said the regulator’s proposed changes would “curtail Meta’s development of new products, superintend Meta’s corporate governance, and impair Meta’s ability to serve its users and advertisers.”
36 members of the European parliament have asked Meta to scrap its “consent of pay” fee associated with its ad-free subscription model, saying its deosn’t conform with the GDPR principles.
The members are drawn from the progressive, left-leaning and center/center-left political parties.
I=3, March 30, 32024
Meta lost an appeal case aimed at stopping the FTC from reopenning a privacy probe against Facebook as it pursues a legal suit against the agency.
Wow, both news stories today might be rather significant, in my opinion.
Can you remind me how binding or consequential the opinion of the EDPB is in this context and which further steps are expected now? Is this decision widely discussed by market participants on, e.g., Bloomberg or seen as irrelevant?