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Meta Faces $400M Fine by DPC for Violating EU Privacy Laws

The Data Protection Commission (DPC) has slapped Meta Platforms Ireland Limited (NASDAQ: META) with two fines totaling about $414 million for breaching EU privacy laws. The Irish regulator concluded on the violations and appropriate fine after years of investigation of the technology company. The DPC launched an inquiry into Meta on the 25th of May, 2018- the same day the EU’s General Data Protection Regulation (GDPR) came into effect. The GDPR places firms under strict control concerning the processing, handling, and storing of people’s information and data.

Since the investigation started in 2018, the DPC recently announced the conclusion of the two inquiries into Meta Ireland on the 4th of January. The inquiries targeted two complaints about the Facebook and Instagram services. While a complaint was raised by an Austrian data subject on Facebook, the other was by a Belgian data subject on Instagram. Eventually, the EU regulators found that Meta illegally forced users to accept personalized ads while signing up.

The privacy regulator said Meta should be ordered to pay the fine as its advertising and data handling practices violate the EU privacy laws. Specifically, the two fines include the $222.5 million fine for violations of the European Union’s General Data Protection Regulation, or GDPR, and $190.7 million for breaching the same law by Instagram.

Also, the DPC has given Meta three months to bring its data processing operations into compliance. At the end of the day, Meta may begin to give users the option to choose if they want their data to be used for targeted promotions. The company may be at a loss if a large number of people decide to stop sharing their data and information. Meta has, over time, used users’ digital history to prompt ads that suit their needs. In 2021, the company generated about $118 billion in revenue. Wedbush analyst Dan Ives said the development “could be a major gut punch” for the tech giant. He noted that the judge could impact 5-7% of the company’s advertising revenue.

However, Meta is planning to appeal the ruling, adding that it does not mean a ban on personalized advertising. As such, businesses may continue to use their platforms to target users with ads. A spokesperson told CNBC:

“The suggestion that personalized ads can no longer be offered by meta across Europe unless each user’s agreement has first been sought is incorrect. There has been a lack of regulatory clarity on this issue, and the debate among regulators and policymakers around which legal basis is most appropriate in a given situation has been ongoing for some time.”

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Meta Faces $400M Fine by DPC for Violating EU Privacy Laws

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