The European Commission said it’s investigating Meta Platforms for a potential violation of its Digital Services Act by failing to counter disinformation and deceptive advertisements.
“The suspected infringements cover Meta’s policies and practices relating to deceptive advertising and political content on its services. They also concern the non-availability of an effective third-party real-time civic discourse and election-monitoring tool ahead of the elections to the European Parliament, against the background of Meta’s deprecation of its real-time public insights tool CrowdTangle without an adequate replacement,” the statement reads.
Meta could be fined up to 6% of its global annual turnover if found to be in violation of the legislation.
The EU Commission has open a formal proceeding to assess whether Meta has breached the DSA in areas related to child safety.
“The Commission is concerned that the systems of both Facebook and Instagram, including their algorithms, may stimulate behavioural addictions in children, as well as create so-called ‘rabbit-hole effects’. In addition, the Commission is also concerned about age-assurance and verification methods put in place by Meta,” the Commission said in a statement.
The commission said they decided to open the probe based on an analysis of a risk assessment report sent by Meta in September 2023.
Infringement of the DSA rules could attract a penalty of up to 6% of the company’s annual global turnover.
Do you have any additional assessment which kind of realistic consequences this could have for Meta and how likely any penalty or change/ restriction of products is?
Given that the EU Commission is focused on cracking down on big tech wrongdoings and similar actions against Meta in United States, I would expect the findings to be skewed against Meta. However, I don’t expect drastic actions such as hefty fines or ban on its services since the Commission would be seen as stifling big tech. Also, there haven’t been any significant fines in the past. In February, TikTok was fined only 345 million euros over the way it processed children’s privacy data. Additionally, some experts believe Meta could have already documented its risk assessments and policies around the issue of child safety given it has been accused severally in the past. Another expert believes that proofing the wrongdoing could be hard.
"Considering the scrutiny that Meta has faced in recent years – especially in regard to childrens’ safety, it would be shocking if Meta has not adequately completed and documented their assessments and policies around the issues raised,” said Calli Schroeder, senior counsel and global privacy counsel at the Electronic Privacy Information Center (EPIC).
“I get the sense that the EU wants to be seen as a tough arbiter of digital safety and protections, and hence it will be looking to make some statement judgments as quickly as possible. However, I believe Meta has accounted for this kind of challenge,” says Bill Fisher, a principal analyst at eMarketer. “Its platforms were always likely to be some of the first in the crosshairs, so it likely has legal arguments in place and financial contingency to account for.”
“It is very difficult to prove that design itself is ‘addictive,’ even if minors, for whatever reason, get addicted. It is equally difficult to posit, from a regulatory perspective, that any other design would be less addictive or what such a concept could look like,” said Irina Tsukerman, a US national security lawyer and the president of Scarab Rising, a media and security consultancy.
Meta agrees to a $1.4 billion settlement (paid in installments) in Texas biometric law suit
Meta Platforms agreed to pay $1.4 billion to settle a Texas biometric data law suit.
The settlement will be paid over five year with the first installment of $500 million being paid within 30 days after the closure of the agreement and the remaining installments of $225 million each being paid in 2025 to 2028.
Assessment of the impact of Google’s antitrust ruling on Meta Platforms
Though Google’s antitrust ruling will mostly benefit the likes of Microsoft and OpenAI, it emboldens regulators and courts to take on Big Tech. In particular, Meta Platforms is facing a Federal Trade Commission (FTC) reopened legal suit over its acquisitions of Instagram and WhatsApp.
The ruling on Google’s monopoly of data also affects Meta Platforms in some way. For instance, a legal case wanting Meta not to give its Marketplace preferential rankings over alternatives could be launched just like what is under EU’s Digital Markets Act.
I=4 UK’s competition authority accepts Meta’s changes to how it use Marketplace ad data
UK Competition and Markets Authority (CMA) said today that it has accepted Meta’s changes to how it uses customer data on its Marketplace.
Under the new proposals, Marketplace advertisers’ data will not be used to improve the marketplace without opting in.
The authority was investigating whether Meta hold an unfair advantage over online advertising.
Assessment
Though the decision could inform other antitrust laws facing Meta Platforms such as that launched by the EU Commission, it reduces Meta’s Marketplace moat and its ability to improve the niche’s ad algorithm.
Irish Data Protection Commission has fined Meta €91million for inadvertently storing certain passwords of social media users in “plain text” on its internal systems.
I=5 Meta loses an EU case challenging the use of personal data obtained outside its platforms for ad targeting
A European Union activist has won a suit seeking to stop Meta from using personal data obtained outside its platforms for ad targeting.
“An online social network such as Facebook cannot use all of the personal data obtained for the purposes of targeted advertising, without restriction as to time and without distinction as to type of data,” the court said.
Katharina Raabe-Stuppnig, a lawyer representing the activist said the ruling will limit the amount of data that Meta can use for its targeted ads.
“Following this ruling only a small part of Meta’s data pool will be allowed to be used for advertising — even when users consent to ads,” she said.
Meta said it is waiting the court’s publication but said “it takes privacy very seriously” and has put in place tools to allow users to manage how Meta uses their information.
I=4 India’s competition authority ordered Meta to stop sharing WhatsApp user data with its other platforms for five years
India’s competition authority ordered Meta to stop sharing WhatsApp user data with its other platforms for advertising purposes for five years and a $25.4 million fine for antirust violations in 2021.
The 2021 antitrust violation relates to WhatsApp’s privacy policy that required users to share data with other Meta Platforms or stop using the messaging a service, an action that resulted in denial of market access for its rivals.
WhatsApp has more than 450 million monthly active users in the country.
Meta Platforms refuted the authority’s claims and said it will appeal the decision.
Meta said in an audit of their Digital Services Act (DSA) compliance measures, over 90% of the conclusions met the regulation with the company receiving no “adverse” conclusions.
Meta is currently facing a EU Commission investigation on whether it breached the DSA in areas related to child safety.
I=6 EU Commission is probing Meta and Google for colluding to target minors for ads
The EU Commission is probing Meta and Google for going against the former’s rules related to how minors should be treated online, the Financial Times reported.
The probe follows Financial Time’s investigation that established Google employees were helping Meta bypass the company’s search rules on how online advertising can be directed to minors.
The EU Commission declined to comment on this report.
EU’s Digital Service Act (DSA) allows the commission to impose a fine of up to 6% of the company’s global turnover in case of such infringements.
I=4 Meta under investigation in Texas over children privacy and safety practices
Meta is one of the companies under investigation in Texas over privacy and safety practices concerning minors.
The investigation was launched pursuant to the Securing Children Online through Parental Empowerment (SCOPE) act which came into effect in September 2024 and can fine companies up to $10,000 per violation.
The investigation follows a July settlement of $1.4 billion to the State of Texas by Meta Platforms for unlawfully collecting and using facial recognition data.
I=4
The EU Data Protection Commission has fined Meta Platforms 251 million euros for a 2018 data breach that impacted 29 million Facebook users globally, including 3 million from the EU.
I=7 US Supreme Court allows $7 billion advertising class action suit against Meta to proceed
The US Supreme Court declined to hear a bid by Meta to avoid class action suit by advertisers who claim the company overcharged them by inflating the number of people their ads could reach by as much as 400%.
The decision follows a Court of Appeals ruling against Meta in March 2024 that said the advertisers could claim damages, which they said exceeds $7 billion.
Meta was disputing the “common course of conduct” saying that not all advertisers were misled or affected equally.
Since class action suits are lengthy and costly, most of them usually end up in settlement. For instance, according to Davis Wright Tremaine, between 1997 and 2022, 46% of core federal securities class action suits were settled, 43% were dismissed, 0.5% were remanded, 0.4% went to trial and 10% were pending.
Similarly, some class action suits don’t end up in any payments. For example, a $5 billion data class action suit against Google settled at zero payment.
In 2022, Facebook paid $725 million to settle Cambridge Analytica suit from users, the largest that the company had ever paid to settle a private class action.
Assessment
Given that Cambridge Analytica had received a lot of attention, I won’t be surprised if Meta settles this class action suit for much less, especially since it has legal resources to fight the suit.
Oh. The most relevant element in my opinion here is the timeframe for which those advertisers claim they have been overcharged. When was this? We want to make sure its in the past and not an ongoing situation