BRUSSELS/BANGALORE, Dec 6 (Reuters) – Meta (META.O) will only be able to serve advertising based on personal data with users’ consent, according to a confidential EU privacy watchdog ruling, a person familiar with the matter said on Tuesday. , a blow to the American social network.
The Irish data protection agency, which oversees Meta as its European headquarters are located in Dublin, has been given a month to issue a decision based on the binding decision of the European Data Protection Board (EDPB).
The EDPB will likely demand fines from the Irish body, the person said, asking not to be named due to the sensitivity of the issue.
Big Tech’s targeted advertising model and the way data is collected and used has caught the attention of regulators around the world.
Shares of the company were down 6.2% in mid-term trading. Google (GOOGL.O), Snap (SNAP.N) and Pinterest (PINS.N), which rely on digital advertising, fell 2.2%, 8% and 4% respectively.
The Irish case against Meta was sparked by a complaint from Austrian privacy activist Max Schrems in 2018.
“Instead of having a yes/no option for personalized ads, they just moved the consent clause into the terms and conditions. This is not only unfair but clearly illegal. We don’t know of any other company that has attempted to ignore the GDPR in such an arrogant way,” Schrems said in a statement.
He said the EDPB’s decision means Meta must allow users to have a version of all apps that doesn’t use personal data for ads, while the company would still be allowed to use data. non-personal to personalize advertisements or simply ask users for consent.
The 27-country bloc’s landmark privacy rules, known as the General Data Protection Regulation, came into effect in 2018.
Meta is committed to the Irish body, a Meta spokesperson said.
“The GDPR allows for a range of legal bases under which data may be processed, beyond consent or the performance of a contract. Under the GDPR, there is no hierarchy between these bases legal, and none should be considered better than another,” the spokesperson said. .
Apple’s (AAPL.O) new privacy rules, which prevent digital advertisers from tracking iPhone users, have also dealt a blow to parent Facebook.
A spokeswoman for the EDPB declined to provide details of the decisions taken. The agency said it came after other national watchdogs disagreed with the Irish agency’s draft decision.
Its draft rulings on Facebook and Instagram, the parent company of Meta, relate to the lawfulness and transparency of processing for behavioral advertising purposes, while its ruling on WhatsApp relates to the lawfulness of processing for the purpose of improving services.
“The DPC cannot comment on the content of the decisions at this stage. We have one month to adopt the binding EDPS decisions and will then publish the details,” the Irish Data Protection Commission said.
Meta may need to change its business model, said Helena Brown, data and privacy manager at London law firm Addleshaw Goddard.
“The direction of travel appears to be that European regulators will not allow Meta to hide behind ‘provision of services’ as a basis for using personal data for behavioral advertising,” she said.
“Instead, Meta may need to change its approach to seeking clear and explicit consent instead. It will be a challenge for Meta to be able to explain its practices in a way that such consent can be lawful and well informed,” Brown said.
The WSJ first reported on the EDPB’s decision.
Reporting by Foo Yun Chee in Brussels and Chavi Mehta in Bangalore; Editing by Vinay Dwivedi, Krishna Chandra Eluri and Barbara Lewis
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