The decision could limit Meta’s ability to sell personalized ads based on users’ digital activities, The Wall Street Journal reported.
European Union regulators have ordered Meta Platforms Inc not to require users to consent to its ads based on their digital activities, The Wall Street Journal reports, citing people familiar with the ruling.
The decision was announced on Tuesday and approved on Monday by the EU’s representative body for privacy regulators. That could limit Meta’s ability to sell such ads, the report said.
The company’s shares were down 5.3 percent in morning trading.
The agency said that EU privacy laws do not allow Meta social networks, such as Facebook and Instagram, to use their data as a reason to allow advertising based on what users capture and view within their apps, according to the report.
The decision, which has not been made public, does not directly order Meta to change its practices but calls for Ireland’s Data Protection Commission (DPC) to issue orders to people who show the decision along with large fines, the newspaper said. Meta’s European headquarters is in Ireland.
“We have fully consulted with the DPC on their questions and will continue to discuss with them once they have finalized their decision,” said a Meta spokesperson.
The decision could be appealed, which could result in a stay pending a lengthy trial, the report said. If confirmed, the proposal could make it harder for Meta and other platforms to show users ads based on what they capture and view within their apps.
Over the years, Meta’s social media platform has allowed users to opt-out of their favorite ads, which are targeted based on information collected about user behavior and choices on other apps and websites. But the EU ruling could prevent Meta from targeting ads based on users’ content within their apps.
Apple’s new privacy rules, which limit digital advertisers from tracking iPhone users, have also been troubling Meta.
Shares of companies that rely on digital marketing fell on the news. Snap was down 7.9 percent, and Pinterest sank 4.3 percent.
The DPC did not respond to Reuters’ request for comment. The European Data Protection Board, the representative body for all data protection regulators in the EU, declined to provide details of the decision.