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The EU Just Restricted Meta’s Personalized Ads, Will the Company Survive?

Facebook’s entire business model was based on serving personalized ads, but in spite of the fact that this is the case a confluence of recent events have brought the social media giant to its knees. Its parent company Meta is now being hit with a new set of regulations that will prevent it from forcing users to consent to third party tracking and personalized ads if they want to use its platforms.

The EU is famous for its privacy regulations, and this latest bill could be a death knell for the struggling company. Meta has already suffered a reported loss of $10 billon due to Apple’s recent updates which toggled third party tracking off by default. This new regulation could make matters even worse than might have been the case otherwise.

With all of that having been said and now out of the way, it is important to note that these restrictions are not automatically going to apply to Meta. They will be sent to the regulatory board in Ireland where Meta’s operations are headquartered, and if the decision is upheld it could spell real trouble for Meta considering all of the other factors at play.

Most users are wary of being tracked because of the fact that this is the sort of thing that could potentially end up infringing on their privacy. In spite of the fact that this is the case, Meta has managed to continue using third party tracking through various means. The EU is now clamping down on this, and it will be interesting to see how Meta reacts.

The social media company can’t afford to lose the hundreds of millions of users it has in the EU, but it also might not be willing to service an area that has suddenly become unprofitable. Meta has threatened to pull out of the EU in the past, though these comments were met with disdain by EU officials. The fallout from this new restriction could have wider implications for the advertising economy, and it will force Meta to act quickly and make some big changes lest it collapses.


H/T: WSJ / TC

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