The ruling could limit the data Meta can access to sell personalized ads based on users’ digital activity, The Wall Street Journal reports.
European Union regulators have ruled that Meta Platforms Inc cannot require users to agree to personalized ads based on their digital activity, The Wall Street Journal reports, citing people familiar with the decision.
The ruling was reported on Tuesday and approved on Monday by a board representing all EU privacy regulators. It could limit the data Meta can access to sell such ads, the report said.
Shares of the company fell 5.3 percent in morning trading.
The board ruled that EU privacy laws do not allow Meta’s social media platforms, such as Facebook and Instagram, to use their terms of service as justification for allowing ads based on what users tap and view on their apps, the report said.
The ruling, which has not yet been made public, does not directly instruct Meta to change practices, but calls on Ireland’s Data Protection Commission (DPC) to issue public orders reflecting the decision, along with significant fines, the paper reported. . Meta’s European headquarters is located in Ireland.
“We have fully engaged with the DPC regarding their investigations and will continue to engage with them as they finalize their decision,” a Meta spokesperson said.
The ruling is subject to appeal, which could lead to its suspension pending potentially protracted litigation, the report said. However, if the decision is upheld, it could make it more difficult for Meta and other platforms to serve their users ads based on what they tap and view in those platforms’ own apps.
For years, Meta’s social media platforms have allowed users to opt out of personalized ads, which target data collected about user behavior and choices in other apps and websites. But the EU ruling could hamper Meta’s ability to target ads based on user activity in their own apps.
Apple’s new privacy rules, which restrict digital advertisers from tracking iPhone users, also hit Meta.
Shares of companies that rely on digital advertising fell on the news. Snap was down 7.9 percent and Pinterest was down 4.3 percent.
The DPC did not respond to a request for comment from Reuters. The European Data Protection Board, the body that represents all EU privacy regulators, declined to provide details about the decision.