Quiver Quantitative - Meta (META), the parent company of Facebook (NASDAQ:META) and Instagram, faces a significant legal challenge in Spain, as the Asociacion de Medios de Informacion (AMI), representing over 80 media outlets, files a lawsuit seeking more than 550 million euros ($598.6 million). The suit alleges Meta's non-compliance with European data-protection laws, accusing the social media giant of systematically using personal data for advertising profiling without user consent. This breach, according to AMI, has given Meta an unfair advantage in the advertising market and poses a threat to the sustainability of Spain's media landscape.
AMI's lawsuit targets Meta's practices from the inception of the European data-protection regulations on May 25, 2018, until earlier this year. The lawsuit emphasizes the gravity of Meta's alleged data misuse, considering it both "massive" and "systematic." This legal action could significantly impact Meta, already grappling with the European Union's July ruling requiring user consent for targeted ads based on online activity. This ruling has challenged Meta's business model, which heavily relies on personalized advertising.
Meta, yet to receive the legal documents, has not commented on the lawsuit. However, in response to the EU's stricter data privacy regulations, Meta announced in October an alternative for its users in the European bloc. Users can now choose to continue using Facebook or Instagram for free with ads or opt for a monthly subscription that offers an ad-free experience. This subscription model ensures that subscribers will not encounter ads, and Meta will not use their information for personalized advertising.
The outcome of this lawsuit could set a precedent in the digital advertising industry, particularly concerning user data privacy and consent. It underscores the growing legal and regulatory scrutiny facing major tech companies like Meta in their handling of personal data and advertising practices.
This article was originally published on Quiver Quantitative