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Meta fined €390 million in latest privacy crackdown in Europe

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LONDON (AP) – European Union regulators on Wednesday slapped hundreds of millions of fines on Facebook parent Meta for privacy breaches and banned the company from forcing users in the 27-nation bloc to agree to personalized ads with based on your online activities.

Ireland’s Data Protection Commission imposed two fines totaling €390 million ($414 million) in its decision in two cases that could undermine Meta’s business model of targeting users with ads based on what they do online. The company says it will appeal.

A decision in a third case involving Meta’s WhatsApp messaging service is expected later this month.

Meta and other big tech companies are under pressure from the European Union’s privacy rules, which are some of the strictest in the world. Irish regulators have already imposed four other fines on Meta for data privacy breaches since 2021 that total over €900 million and have a number of other cases open against various Silicon Valley companies.

Meta also faces regulatory headaches from EU antitrust authorities in Brussels flexing its muscles against tech giants: they accused the company last month of distorting competition in classified ads..

The Irish regulator – Meta’s main European data privacy regulator because its regional headquarters are in Dublin – fined the company €210m for breaches of EU data privacy rules involving Facebook and an additional €180m for violations involving Instagram.

The decision stems from complaints filed in May 2018, when the 27-nation bloc’s privacy rules, known as the General Data Protection Regulation, or GDPR, took effect.

Previously, Meta relied on users’ informed consent to process their personal data to serve them with personalized or behavioral ads based on what users search online, the websites they visit or the videos they click.

When the GDPR came into effect, the company changed the legal basis under which it processes user data, adding a clause to the terms of service for advertisements, effectively forcing users to agree that their data can be used. This violates EU privacy rules.

The Irish watchdog initially sided with Meta but changed its stance after its draft decision was sent to a board of EU data protection regulators, many of whom opposed it.

In its final ruling, the Irish watchdog said Meta “has no right to rely on the legal basis of ‘contract’” to deliver behavioral ads on Facebook and Instagram.

Meta said in a statement that “we strongly believe that our approach respects the GDPR and therefore we are disappointed with these decisions and intend to appeal both the substance of the decisions and the fines.”

Meta has three months to ensure its “processing operations” comply with EU rules, although the decision does not specify what the company must do. Meta noted that the decision does not prevent the display of personalized ads, it only covers the legal basis for handling user data.

Max Schrems, the Austrian lawyer and privacy activist who filed the complaints, said the decision could be a huge blow to the company’s profits in the EU, because “now people need to be asked if they want their data to be used for Ads or not. ” and can change their mind at any time.

“The decision also ensures a level playing field with other advertisers who also need to obtain opt-in consent,” he said.

Making changes to comply with the decision can increase costs for a company that already faces increasing business challenges. Meta reports two consecutive quarters of revenue declines how advertising sales dropped due to competition from TikTok and laid off 11,000 workers amid broader tech industry woes.