The ruling, which carries a fine of 390 million euros ($414 million), is targeted specifically at Facebook and Instagram, but is a major blow to Big Tech as a whole. It’s also a sign that GDPR, the historic European privacy law introduced in 2018, really has teeth. More than 1,400 fines have been introduced since it came into force, but this time the regulators of the blockade have shown that they are willing to take on the same business model that makes surveillance capitalism, a coined term by American scholar Shoshana Zuboff, tick. “It’s the beginning of the end of free data for all,” says Johnny Ryan, privacy campaigner and senior member of the Irish Council for Civil Liberties.
To understand why, you need to understand how Meta makes its billions. Right now, Meta users opt for personalized advertising by accepting the company’s terms of service — a lengthy contract that users must agree to in order to use its products. In a ruling yesterday, the Irish data controller, who oversees Meta as the company’s EU headquarters is based in Dublin, She said bundling personalized ads with terms of service in this way was a violation of the GDPR. The ruling is a response to two complaints, both filed on the day GDPR took effect in 2018.
Meta says it plans to appeal, but the ruling shows change is inevitable, privacy campaigners say. “He really asks the entire advertising industry, how do they get on? And how do they move forward in order to stop these litigations that require them to constantly change? says Estelle Masse, global head of data protection at digital rights group Access Now.
EU regulators have not told Meta how to reform its operations, but many believe the company has only one option: introduce an Apple-style system that explicitly asks users if they want to be monitored.
Apples 2021 privacy change it has been a major blow to companies that rely on user data for ad revenue, especially Meta. In February 2022, Meta told investors that Apple’s move would cut the company’s 2022 sales by about $10 billion. Research shows that when given the choice, a large chunk of Apple users (between 54 And 96 percent, according to various estimates) refused to be monitored. If Meta were forced to introduce a similar system, it would threaten one of the company’s main revenue streams.
Meta denies it needs to change how it operates in response to the EU ruling, arguing it just needs to find a new way to legally justify how it processes people’s data. “We want to reassure users and businesses that they can continue to benefit from personalized advertising across the EU through Meta’s platforms,” the company said. She said in a statement.
Yet Max Schrems, an Austrian privacy activist whose nonprofit NOYB filed both complaints addressed in the ruling, calls this response “PR bullshit” and argues that Meta is trying to avoid telling investors it’s out of stock. legal arguments to defend its business model.
This ruling is part of a larger move away from the unregulated model of online advertising that has existed for years, according to Schrems. Five years ago, Europe kicked off legal change by introducing the GDPR, even as new privacy rules were not actually applied, he says. That legal change was followed by what Schrems calls “technical changes,” in the form of privacy changes introduced by Google and Apple. “They were [seeing] the combination of technical and legal changes moving in the same direction,” he says.
While Apple’s changes take a chunk out of Meta, Google is going for it remake of advertising cookies. It’s a plan that has proven controversial, and in July, Google delayed the phaseout to the second half of 2024, citing advertiser requests for more time. Opposition to phasing out isn’t just coming from the tech sector. A coalition of Germany’s largest publishers, including the owner of the newspapers Bild and Politico, complained last year that without cookies their revenue would suffer.
Despite Google’s planned move away from cookies, the company said moving away from personalized advertising altogether would jeopardize online information authority. “This isn’t going to pay for the web that everyone wants,” Claire Noburn, head of privacy for Google ads, discussed in a September op-ed, adding that eliminating personalized advertising would deprive the open web, including publishers, of crucial funds.
Some envision an opt-in economy. “If everything becomes opt-in in the future, I think we have gained a lot because then we will actually have to understand what we are opting into,” says Pernille Tranberg, co-founder of the Danish think tank Data Ethics EU. Tranberg isn’t against personalized advertising, but she wants to pick and choose which sites give her data about her, depending on their reputation: She probably wouldn’t give her data to Facebook, she says, but she could give it to a newspaper or a a library.
Others are more uncompromising about the future. Access Now Masses advocates the move to tracker-less contextual advertising, which tailors ads based on context. For example, an article about cars might contain an advertisement for Volkswagen.
But not everyone agrees on the definition of contextual ads. And parts of the advertising industry are still figuring out how they can include personalization within the contextual ad model, according to Masse. Yesterday’s EU ruling could signal that we are entering a new era of online advertising and that surveillance capitalism is taking its last gasp. But with personalized ads offered as part of an alternative system, what comes next may not seem all that different.