European Union regulators have ruled Meta Platforms Inc should not require users to agree to personalised 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 may access to sell such ads, the report said.
Shares of the company fell 5.3 percent in morning trading.
The board ruled the EU’s privacy law does not allow Meta’s social media platforms, such as Facebook and Instagram, to use their terms of service as a justification to permit advertising based on what users tap and watch within their apps, according to the report.
The ruling, which has not yet been disclosed publicly, does not directly order Meta to change practices but calls for Ireland’s Data Protection Commission (DPC) to issue public orders that reflect the decision along with significant fines, the newspaper reported. Meta’s European headquarters is based in Ireland.
“We’ve engaged fully with the DPC on their inquiries and will continue to engage with them as they finalize their decision,” a Meta spokesperson said.
The ruling may be appealed, which could lead to its suspension pending potentially lengthy litigation, the report said. If upheld, though, the decision could make it harder for Meta and other platforms to show their users ads based on what they tap and watch within those platforms’ own apps.
For years, Meta’s social media platforms have allowed users to opt out of personalized ads, which are targeted based on data collected about user behaviour and choices across other apps and websites. But the EU ruling could stifle Meta’s ability to target ads based on user activity inside their own apps.
Apple’s new privacy rules, which limit digital advertisers from tracking iPhone users, have also been a blow to Meta.
Shares of companies reliant on digital advertising fell on the news. Snap was down 7.9 percent, and Pinterest sank 4.3 percent.
The DPC did not respond to a Reuters request for comment. The European Data Protection Board, the body representing all EU privacy regulators, declined to provide details of the decision.