Meta reportedly set to overhaul EU ad policies

Meta is reportedly planning significant changes to its advertising policies in the European Union amid a regulatory crackdown.

Meta may allow only European users to opt out of personalised ads on its platforms in favour of broader categories like age and location by submitting an online form, the Wall Street Journal reported on Thursday (30 March).

The major shift would follow the decision of the Irish Data Protection Commissioner (DPC) that, in January, found that the legal basis of Facebook and Instagram to process personal data was in breach of EU law and fined the platforms €210 million and €180 million, respectively.

The tech company has until April to find a new approach after the Irish authority invalidated its previous legal basis for processing data for advertising purposes, based on the contract model, whereby users gave consent in utilising the service.

In a blog post published on Thursday (30 March), Meta said that to comply with the ruling, it would from 5 April deploy a “legitimate interest” legal basis for advertising, another of the General Data Protection Regulation’s (GDPR) conditions on which organisations can process personal data.

Facebook, Instagram’s legal basis for personalised ads found in breach of EU law

The two decisions published on Wednesday (4 January) are a major setback for the Meta-owned social media as they risk jeopardising the company’s entire business model and come with a hefty fine.

New legal basis

Legitimate interest hinges on the idea that such processing occurs within a client relationship – without express consent – to pursue the service provider’s legitimate interests as long as this is not to the detriment of the user’s interests or fundamental rights and freedoms.

Tech companies’ attempts to use this justification have previously been defeated, for instance, in a 2022 case which saw TikTok’s use of the basis for the provision of personalised ads struck down by the Italian Data Protection Authority.

Meta also insisted that its previous approach was not a breach of the GDPR, saying it would appeal “both the substance of the rulings and the fines”.

Digital rights group NOYB, which was behind the complaint that led to the ‘contract’ legal basis being found illegal, has criticised the move, arguing that the new approach is no better than the last.

In 2018 the group, led by notorious activist Max Schrems, launched the complaints against Meta that eventually led to the DPC’s ruling in this case, and has pledged to initiate fresh legal action against the legitimate interest model.

“Meta is switching one illegal practice for another illegal practice. NOYB will take imminent legal action to stop this charade,” said Schrems.

“Like any other company, Meta needs to have a clear yes/no option for users, where they must actively say yes if they want to give up their fundamental rights. This system of using legitimate interest at least allows for opt-out, which makes it a slight improvement for users.”

Political advertising

The change of legal basis seems to be part of a broader rethinking of Meta’s advertising business in Europe.

According to the Financial Times, the company is considering introducing a ban on political advertising in Europe over concerns about compliance with Brussels’ proposed regulation on political advertising introducing stricter requirements for platforms, notably in terms of transparency about sponsorhip.

Meta is reportedly discussing introducing a ban on political ads in Europe in response to the EU’s draft law, which is in the final stage of the negotiations with a political trilogue held on Thursday (30 March).

The Financial Times reports that the company is concerned that the proposal’s definition of political ads is so broad that it would be extremely difficult to comply with, making a ban on such material in Europe the easier option, particularly given that it does not generate a major portion of overall revenue.

As Meta’s management is allegedly split over the issue, the final decision might come down to where the EU regulation lands regarding defining political advertising.

Meta did not react to EURACTIV’s request for comment by the time of publication.

EU Parliament adopts position on political advertising regulation

EU lawmakers approved the internal market (IMCO) committee’s text on the Regulation on Political Advertising, paving the way for the next phase of the legislative process.