Meta fined 390M euros in latest European privacy crackdown

Meta fined 390M euros in latest European privacy crackdown

LONDON — Wednesday was a busy day for European Union regulators Facebook Meta parent was fined hundreds of millions for privacy violations. The company was also banned from forcing users to consent to personalized ads based upon their online activity.

The Data Protection Commission of Ireland imposed two fines totaling 390 millions euros ($414 Million) in two cases. This could shake up Meta’s business model, which targets users based on their online activities. The company promises to appeal.

A decision in a third case that involved Meta’s WhatsApp A messaging service will be available later in the month.

The European Union’s privacy rules are some of the most stringent in the world and have put pressure on Meta and other Big Tech companies. Meta has already been hit with four additional fines by the Irish regulators for data privacy violations since 2021. These fines total more than 900 millions euros and there are a host of other cases against Silicon Valley companies.

Meta is also facing regulatory headaches from EU Antitrust officials in Brussels, who are flexing their muscles in the face of tech giants. They accused Meta last month for distorting competition through classified ads.

The company was fined 210 million euro by the Irish watchdog, Meta, which is Europe’s leading data privacy regulator due to its regional headquarters in Dublin.

This decision is based on complaints that were filed in May 2018, when the privacy rules of the 27-nation bloc, also known as the General Data Protection Regulation (or GDPR), went into effect.

Meta previously relied on users’ informed consent to process their personal information to provide them with personalized, or behavior-based, ads. These ads are based on what users search online, the websites they visit, and the videos they click.

The company added a clause to its terms of service for advertising to change the legal basis on which it processed user data. This effectively forced users to consent to their data being used. This is a violation of EU privacy rules.

The Irish watchdog initially supported Meta, but it changed its mind after the draft decision was sent out to a board made up of EU data protection regulators. Many of them objected.

The Irish watchdog concluded that Meta “is not entitled” to rely on the “contract” legal basis to deliver behavioral ads via Instagram and Facebook.

Meta stated in a statement that they strongly believed their approach respected GDPR. They were therefore disappointed by the decisions and plan to appeal the fines.

Meta has three months to ensure that its “processing operations” conform to EU rules. However, the ruling doesn’t specify what the company must do. Meta said that although the decision does not prohibit it from showing personalized ads, it does not stop it from doing so.

Max Schrems, an Austrian lawyer and privacy activist, filed the complaints. He said that the ruling could be a major blow to the company’s profits in Europe because “people now have to be asked whether they want their data used for ads or no” and can also change their mind at any point.

He stated that the decision “also ensures a level playing ground with other advertisers, which also need to obtain opt-in consent.”

A company that is already facing increasing business challenges may have to make changes to comply with the decision. Meta reported declining revenue for two consecutive quarters due to lower advertising sales from TikTok. It also laid off 11,000 employees amid wider tech industry woes.

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