Meta, the Silicon Valley tech giant facing considerable criticism for its privacy violations, is encountering substantial resistance, and surprisingly, it’s not coming from the European Union but from the small country of Norway. This situation has prompted speculation about whether this ‘David versus Goliath’ scenario could potentially lead to a downfall for the tech behemoth.
Effective immediately, Norway has imposed a daily fine of approximately $100,000 (equivalent to NOK 1,000,000) on Meta, a decision that was announced last month. The core contention from Norway revolves around the assertion that personalized advertising on Facebook and Instagram, both owned by Meta, is in violation of the country’s laws. In the event that the American corporation persists in flouting the ban on targeted advertising, the penalty will be levied each day.
Challenges to Meta’s Business Model: The Norway Regulatory Ripple Effect
Although the monetary value might appear relatively insignificant for a tech giant like Meta, there are two pivotal factors that could ultimately challenge the company’s prevailing business model:
Firstly, the daily fine of $100,000 imposed by Norway becomes substantial when viewed in the context of the country’s population of approximately 5.4 million people. Even if a conservative estimate of 20 percent of the populace uses Facebook on a regular basis is taken into account, the fine translates to 10 cents per user per day. It’s arguable whether Meta generates a profit of this magnitude per user on a daily basis.
Secondly, the significance of Norway’s action lies not solely in the monetary aspect. This fine can be seen as a precursor to a larger movement, as the Norwegian Data Protection Authority is now urging European regulatory bodies to adopt measures against the targeted and personalized advertising practices employed by Facebook and Instagram. This potentially sets the stage for a coordinated stance across Europe against Meta’s advertising strategies.
The collision between Meta and Norway presents an intriguing conundrum. While the imposed fine might not appear overwhelmingly substantial, the cumulative impact of such penalties and the potential for broader regulatory actions across Europe could indeed pose formidable challenges to Meta’s conventional operational paradigm. The coming months will likely shed light on whether this scenario unfolds as a decisive moment in reshaping the tech giant’s trajectory.
The Norwegian Data Protection Authority has taken a significant step by imposing a fine directly aimed at the core of Facebook’s and Instagram’s business strategy: targeted advertising.
Norwegian Opposition to Targeted Advertisements and Legal Action Against Meta’s Profiling Practices
Norway has a reputation for actively opposing the concept of targeted advertisements. In 2021, the Norwegian Consumer Council released a comprehensive report advocating for the prohibition of surveillance-driven ads. This was subsequently echoed by privacy-focused companies like Tutanota, who also called for a ban on targeted ads.
The critique raised by the Norwegian authority against Facebook and Instagram can be summarized as follows:
“Meta tracks in detail the activity of users of its Facebook and Instagram platforms. Users are profiled based on where they are, what type of content they show interest in and what they publish, amongst others. These personal profiles are used for marketing purposes – so called behavioural advertising. The Norwegian Data Protection Authority considers that the practice of Meta is illegal and is therefore imposing a temporary ban of behavioural advertising on Facebook and Instagram.”
The recent decision to classify Facebook’s and Instagram’s profiling and targeted advertising as unlawful comes shortly after the European Court of Justice (ECJ) ruling that bars Meta from gathering personal data from users, such as their location and behaviour, for advertising purposes.
Norway Data Protection Authority’s Standpoint on Meta’s Unauthorized Behavioral Advertising
Earlier, in December 2022, the Irish Data Protection Commission made a determination on behalf of all data protection authorities in the European single market (EEA). This ruling established that Meta had engaged in unauthorized behavioural advertising. Although Meta implemented certain modifications, these changes were not judged to be adequate, as their behavioural advertising practices remained non-compliant with the law. This led to the issuance of a new ruling by the ECJ.
The Norwegian regulatory body, Datatilsynet, has escalated its concerns to the European Data Protection Board. This move could potentially extend the penalties imposed on Meta across Europe.
Tobias Judin, who heads Datatilsynet’s international section, emphasized, “It is so clear that this is illegal that we need to intervene now and immediately. We cannot wait any longer” The intention is to exert “added pressure” on Meta.
Given its membership in the European single market but not in the EU, Norway retains the authority to take independent actions against Meta.
The Norwegian Data Protection Authority’s stance is clear: their goal isn’t to outright ban Facebook or Instagram in Norway but rather to ensure the safe and rights-protected use of these platforms by Norwegian citizens.
Balancing Personalized Advertising and Privacy: Authority’s Concerns and Principles
They do not outright prohibit personalized advertising on Facebook or Instagram. Instead, the aim is to strike a balance between secure usage and individual rights. For instance, Meta can still tailor ads based on user-provided details like location, gender, age, and interests, as long as it’s done with user consent.
However, the core principle is that privacy is a fundamental human right, and this must be upheld in all business models. User data control is paramount, and any tracking must have limitations. The Authority believes that invasive commercial surveillance for marketing purposes poses significant data protection risks on the internet.
The Authority’s argument revolves around the extensive influence Meta wields through targeted ads—both those displayed and those excluded due to perceived mismatches with a user’s profile. This influence extends to political ads, potentially affecting freedom of expression and information. Moreover, there’s a concern that behavioural advertising could perpetuate stereotypes and lead to unfair discrimination against various groups.
Meta’s Threads Platform Awaits EU Entry Amid Privacy Concerns
It’s important to highlight that the recently introduced Threads platform by Meta, which is being touted as a potential alternative to Twitter, is yet to make its debut in the European Union. Despite being accessible in the United States and the United Kingdom, its launch in the EU is still pending.
This situation serves as a clear indicator that Meta is encountering significant resistance from the EU regarding its approach to personalized advertisements. The coming months are poised to be quite intriguing: Will the EU ultimately take a stand to safeguard the privacy rights of its 450 million citizens?
