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Meta to allow European users to opt out of targeted ads

Published 03/30/2023, 01:25 PM
Updated 03/30/2023, 01:33 PM
© Reuters.  Meta (META) to allow European users to opt out of targeted ads

By Michael Elkins

The Wall Street Journal reports Thursday, citing people familiar with the matter, that social media platform company, Meta (NASDAQ:META) is preparing to allow European Facebook and Instagram users to opt out of certain highly personalized ads.

The move comes as part of a plan to limit the impact of a European Union privacy order that was approved in December. The European regulators ruled that Meta shouldn’t require users to agree to personalized ads based on their online activity, a ruling that could limit the data that Meta can access to sell such ads.

Under the plan, Meta, beginning Wednesday, will allow EU users to choose a version of its services that would only target them with ads based on broad categories, such as their age range and general location. Once a user chooses this plan, the platforms will be unable to access data such as what videos they watch or content they click on.

Users who wish to opt out will have to submit an online form objecting to Meta’s use of their in-app activity for ads, and the company will then evaluate any user’s objection before implementing the change, the people said. That could limit the effect of the change to Meta’s advertising business, and fall short of satisfying at least some regulators and privacy activists.

The opt-out comes as Meta faces a compliance deadline for a pair of landmark rulings from Ireland’s Data Protection Commission, which leads enforcement of the EU’s main privacy law for Meta.

The regulator in early January said it was fining Facebook and Instagram a total of €390 million (€1 = $1.0895), or about $423M, in part for requiring users to agree to a contract that includes so-called behavioral ads, which are targeted based on a user’s digital activity. The Irish regulator gave Facebook and Instagram three months to stop relying on their contracts with users.

Meta says it is continuing to appeal those rulings and fines, but it is bound to comply with them meanwhile. “We believe that our previous approach was compliant,” the company said. “It is important to note that this legal change does not prevent personalized advertising on our platform,” it said.

Shares of META are up 0.97% in mid-day trading on Thursday.

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