EU Ruling Prohibits Meta from Processing Personal Data for Behavioral Advertising

Following up on earlier decisions in 2022 and early 2023, the EU in late October issued an urgent order that will ban personal data processing for behavioral advertising by Meta (Facebook/Instagram). The decision rests primarily on findings that users' consent to process personal data was not valid for behavioral advertising in light of EU privacy laws. Meta had argued that it collected user consent to process personal data for delivery of Facebook and Instagram services, which include behavioral advertising. The EU authorities have held that the terms forced users to agree to behavioral advertising and thus the consent did not cover such practices.  

Why It Matters

The online ad market is sure to be greatly affected by this; in addition to binding Facebook and Instagram directly, this decision will have downstream effects on any company that is part of their advertising ecosystem, since EU law holds all parties responsible for data processing decisions. In addition, it is likely that operators must now seek separate consent to behavioral advertising, rather than the general consent to delivery of their services, to users. To navigate the new reality, Meta has proposed a subscription model that would allow users to pay for ad-free services or choose free, but ad-supported services. Regulators have not decided whether to allow such a move. If they do not, the potential for changes in the online ad market – if users must essentially opt in for any behavioral ads – is enormous.  Facebook, Instagram, Google, and other social media have built multi-billion dollar businesses by providing free services, supported by targeted advertising, to consumers.  If they now have to obtain specific permission to target ads to users, that means a big risk to the ad revenue side of things.