Social media giant Facebook will have to obtain consent from its users before serving personalized ads within the European Union, according to the ruling issued by the European Court of Justice (ECJ) on Tuesday.
The EU top court's decision stated that within the meaning of the General Data Protection Regulation (GDPR), “the mere fact that a user visits websites or apps that may reveal such information does not in any way mean that the user manifestly makes public his or her data.”
Instead, the platform’s users keep the right to validly give their consent to the processing of their personal data by the operator, as described in the EU’s top data protection law, which recently marked five years since going into effect.
However, the ECJ explained that this doesn’t only refer to users visiting websites and launching apps, but also making any other kind of related interactions.
“In addition, the same applies where a user enters information into such websites or apps or where he or she clicks or taps on buttons integrated into them, unless he or she has explicitly made the choice beforehand to make the data relating to him or her publicly accessible to an unlimited number of persons,” the ruling concluded.
The ECJ therefore sided with a 2019 antitrust ruling by Germany’s Federal Cartel Office that brought a significant risk to Meta's advertising business model, which capitalizes on data gathered from users' activities on its platforms – Facebook, Instagram, and WhatsApp.
Meta challenged the original decision, prompting German officials to seek guidance from the ECJ, the supreme judicial authority of the 27-member bloc.
Commenting on yesterday’s ruling, a Meta spokesperson told The Wall Street Journal that the tech giant was “evaluating the court's decision” and that it would respond to it in the future.
However, it remains unclear how the ruling will be interpreted by the regulators that will oversee the implementation of this new requirement in practice. Meta Platforms could become obliged to ask users to allow Facebook to show personalized ads, which could strengthen user privacy. However, this could also negatively affect the company’s financial outlook.
EU Tightens Scrutiny Over Big Tech
Last fall, the EU’s Digital Services Act (DSA) went into effect, aiming to “create a safer digital space in which the fundamental rights of all users of digital services are protected.”
The law forced tech companies such as Meta and Google to make it easier for users to flag problems, limited online ads aimed at kids, and empowered EU member states to punish noncompliance with fines totaling billions of euros.
Just a month ago, the European Data Protection Board (EDPB) fined Meta Platforms’ Irish subsidiary €1.2 billion over Meta’s transfers of personal data to the U.S. based on standard contractual clauses since mid-2020. Next to the largest GDPR fine to date, the EDPB ordered Meta to bring its data transfers into compliance with the act.
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