Meta Platforms Inc.
What Happened: Under fire from regulators, Mark Zuckerberg's Meta has proposed to seek users' consent on tailoring ads based on how they use its apps like Facebook and Instagram, reported The Wall Street Journal.
Meta has been under fire from regulators all over the world, and more so in Europe, for its data collection and privacy policies.
For instance, one of its apps, WhatsApp, has been directed by India's Supreme Court to let users use the service without accepting a change in privacy policy in 2021. India is one of the largest markets for WhatsApp.
The Norwegian Data Protection Authority imposed a three-month ban on Meta's behavioral advertising earlier in July. Failing to comply would result in a $100,000 fine per day of violation between August 4 and November 3.
Meta was hit with a $1.3 billion fine in May for violating the EU's data privacy rules. The company started offering European users the ability to request opting out from targeted ads but required them to fill out a lengthy form.
Its new proposal will include a simple "yes" or "no" question before it starts displaying ads.
EU's data privacy rules have also resulted in Meta cutting off European users entirely from its new app Threads.
Ad Revenue Could Be Hit: Targeted advertisements allow Meta to deliver better value to advertisers who don't have to waste money on sending their ads to users who might not be interested in what they have to offer.
With advertisement revenue accounting for 97.5% of Meta's total revenue in 2022, at $113.64 billion, the inability to deliver targeted ads in Europe could impact the company's topline. In its June quarter earnings, Meta said Europe accounted for 23% of its $31.5 billion ad revenue during the quarter, which means it is an important market for the company.
