Facebook (now known as Meta) is facing a $414 million fine from European regulators, who ruled that the company’s services illegally deployed targeted ads using data that tracks users around the internet.
The decision strikes at the heart of Facebook’s business model, which is structured around collecting highly individualized data on users to power a targeted ad machine. It is this model that powered Facebook and Instagram’s social media dominance.
According to the ruling, Facebook violated European data laws through the method it uses to gain user consent for targeted advertising. The consent is buried in the lengthy terms of service agreement used by the company, which users must agree to in order to access Facebook, Instagram, and WhatsApp.
European regulators concluded that by embedding consent within the terms of service and essentially forcing users to accept it if they wished to access Facebook platforms, the tech juggernaut violated Europe’s General Data Protection Regulation (GDPR).
The ruling implies that Facebook must give its European users the ability to use its service while opting out of data collection, undermining a key tenet of the company’s business model. Data about users, such as what users are likely to click on, or what makes them stop scrolling, are a key reason why marketers place ads on the company’s platforms. By targeting that business model, Europe is undermining the very thing that makes Facebook such a profitable business.
It comes at a time when the company is already facing financial turbulence. In November 2022, its stock price dropped below $100 for the first time since 2015, a colossal decline from its peak of $376 in 2021. All tech stocks took a hit in 2022, but Facebook’s decline outstripped that of other Big Tech companies, including Apple, Google, Amazon, and Microsoft.
Mark Zuckerberg’s company is gearing up for a legal fight, saying it will appeal the decision of European regulators. “We strongly believe our approach respects G.D.P.R., and we’re therefore disappointed by these decisions,” said a Facebook representative in a statement.
Allum Bokhari is the senior technology correspondent at Breitbart News. He is the author of #DELETED: Big Tech’s Battle to Erase the Trump Movement and Steal The Election.
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