The European Union may intensify its scrutiny of Meta’s advertising practices, following recommendations from a key legal adviser to the EU’s highest court on Thursday, suggesting that the bloc’s data privacy regulations could impose restrictions on the duration for which personal data is utilized in targeted advertising.
Advocate General Athanasios Rantos, in a guidance that does not hold legal force, expressed that the utilization of personal data for advertising purposes should be subject to limitations.
This guidance is crucial for Meta’s advertisement strategy, which heavily relies on processing extensive personal data to create targeted profiles for advertising. Imposed restrictions on the usage of personal data could impact Meta’s revenue generation model significantly.
While we await a definitive ruling—usually issued three to six months post an AG’s opinion—the European Court of Justice (CJEU) often aligns with its Advocate Generals’ recommendations.
The CJEU’s interpretations of EU law are influential, setting precedence for lower courts and regulatory bodies on how laws should be enforced.
Assessing Proportionality
AG Rantos emphasized that the principles of proportionality must guide the extent of data retention for advertising purposes under the General Data Protection Regulation (GDPR)—indicating the necessity of a lawful basis for data processing operations.
According to a court press release, “Rantos encourages a ruling from the Court asserting that the GDPR does not permit indefinite processing of personal data for targeted advertising, urging a proportional assessment of data retention and processing volumes against the justifiable aim of personalized ad targeting.”
The CJEU’s deliberation on this matter was prompted by an Austrian court, addressing privacy concerns raised against Meta’s advertising technology by Max Schrems, a renowned lawyer and privacy advocate. Schrems’ actions have previously led to significant penalties against Meta, amounting to billions in fines under GDPR enforcement.
A report by Motherboard/Vice in 2022 revealed internal concerns within Meta over its data governance, although Meta contested these findings, asserting its commitment to privacy regulations.
Meta’s core business strategy, heavily reliant on personalized ad targeting, could face significant challenges if legal restrictions on data processing and retention are enforced. The company has indicated that a considerable portion of its global ad revenue originates from the EU.
Lately, EU officials have been advocating for Meta to explore alternatives to its current advertising models, pointing towards less invasive techniques like contextual advertising, in light of investigations into Meta’s operations under strict regulations like the Digital Markets Act.
Restricting Use of Sensitive Data in Advertising
Moreover, AG Rantos weighed in on whether the public disclosure of sensitive information, such as sexual orientation details, grants Meta the freedom to utilize this data for ad targeting.
Schrems had raised concerns over receiving targeted ads on social media platforms, arguing that even public discussions on sensitive topics should not automatically green-light such data for personalized advertising, highlighting the GDPR’s purpose limitation principle.
Echoing Schrems’ viewpoint, the AG opined that public disclosure of sensitive data does not inherently justify its use in personalized advertising.
Reflecting on the AG’s perspective, Katharina Raabe-Stuppnig, representing Schrems, appreciated the stance against indefinite data storage and its implications for personalized advertising. Meta’s extensive data collection practices over the last two decades are under scrutiny, necessitating a more restrained approach in line with ‘data minimisation’ standards as per EU law.
On the matter of utilizing publicly disclosed sensitive data, the implications for online expression are significant. It raises questions about whether public statements inadvertently waive privacy protections over unrelated data, potentially deterring users from engaging in online discussions.
In response to the AG’s opinion, Meta, via spokesperson Matthew Pollard, expressed its intention to await the court’s decision, highlighting ongoing privacy enhancements and investments exceeding €5 billion in EU privacy compliance and user control expansions since 2019.
On the topic of sensitive data, Pollard underscored Meta’s policy to abstain from harnessing provided sensitive information for ad personalization, alongside efforts to exclude such data from advertiser access and eliminate sensitive targeting options.
Despite policy adjustments in 2021 aimed at preventing ad targeting based on sensitive categories, an investigation by The Markup in 2022 uncovered loopholes allowing advertisers to bypass these restrictions, highlighting the ongoing challenges in safeguarding sensitive personal data under GDPR.
Compiled by Techarena.au.
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