Instagram and Facebook Parent Meta Could Take a Hit From EU Ban on Use of Targeted Ads

By
Fatima Attarwala
Fatima Attarwala
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Fatima Attarwala is a business news writer and editor with a decade of experience researching, analyzing, and commenting on issues influencing the economy.
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Published November 02, 2023
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Key Takeaways

  • European authorities moved to ban Meta from showing targeted ads to European users on its social media platforms.
  • The ban comes not long after Meta unveiled generative AI tools to help advertisers better target ads, and rolled out an ad-free subscription service for European users to satisfy European Union privacy rules.
  • Meta, which depends primarily on ads for revenue, could take a hit to ad sales and risk being fined as much as 4% of its global turnover.

Facebook and Instagram parent Meta (META) could take a hit to ad sales and risk being fined as much as 4% of its global turnover as European authorities move to ban the social media giant from showing targeted ads to European users on its social media platforms.

The decision by the European Data Protection Board (EDPB) expands a ban previously imposed by Norway on Meta's use of users' personal data for advertising and covers 30 countries in the European Union (EU) and the European Economic Area (EEA). The EDPB indicated final measures would be taken and the ban would be imposed on Meta within two weeks.

Since Aug. 7, Meta has been subject to a daily fine of 1 million crowns ($90,000) in Norway for failing to comply with its ban on targeted ads.

The social media giant, which depends on ads for most of its revenue, could take a substantial hit from the expanded restrictions, which come not long after Meta unveiled generative AI tools to help advertisers target audiences better, and rolled out an ad-free subscription service for European users to satisfy EU privacy rules.

Just earlier this week, Meta announced a monthly subscription service to use Facebook and Instagram without ads in the EU, EEA, and Switzerland. However, Meta had suggested that advertisers could continue to use personalized ad campaigns to reach European users opting to use Meta's free, ad-supported services.

Meta shares were 0.6% lower as of 12:30 p.m. ET on Thursday, but have gained over 150% year-to-date.

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  1. Reuters. “Facebook owner Meta faces EU ban on targeted advertising.”

  2. EDPB. "EDPB Urgent Binding Decision on processing of personal data for behavioural advertising by Meta."

  3. Meta. “Facebook and Instagram to Offer Subscription for No Ads in Europe.”

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