Facebook and Instagram owner Meta might be hailing the launch of its new rival to Twitter but the tech giant is actually reeling from a double blow in the EU, after being forced to delay the launch in Europe and being hit by a damaging ruling against how it gains consent for targeted advertising.
The new service Threads is linked to Instagram with a Twitter-like interface. It launched in the UK and US at midnight, with reports claiming 10 million users had signed up worldwide within the first few hours.
Pitched as a “friendly” rival to Twitter, which was bought by Elon Musk in October, some believe Threads could attract Twitter users unhappy with recent changes to the platform. It allows users to post up to 500 characters, and has many features similar to Twitter.
However, the company has been forced to halt the EU launch because of the bloc’s Digital Markets Act, which contains provisions on sharing user data across different platforms.
Reports suggest Meta is awaiting further clarification from the European Commission on how the legislation will be implemented before considering its next steps.
And with 293 million Instagram users and more than 410 million Facebook users in the EU, the delay is a significant blow.
Meta also appears to be running out of road in its defence of how it obtains consent for targeted advertising following a landmark ruling by the EU’s top court which threatens to put the kibosh on the tech giant’s whole commercial operation.
In a case brought to the European Court of Justice by Germany’s national competition regulatory agency Bundeskartellamt, the ruling suggests that Meta has been barred from bypassing the consent requirement for tracking and online advertisements by arguing that ads are a part of the “service” that it contractually owes the users.
The alleged switch of legal basis happened exactly on 25 May 2018 at midnight when the GDPR came into force.
Privacy activist and long-term Facebook critic Max Schrems said: “Instead of having a ‘yes/no’ option for personalised ads, they just moved the consent clause in the terms and conditions. This is not just unfair but clearly illegal. We are not aware of any other company that has tried to ignore the GDPR in such an arrogant way.”
The CJEU seems to also trash Meta’s hopes to just move to a so-called “legitimate interest” for advertisements under Article 6(1)(f) GDPR.
While the CJEU has not ruled out that a legitimate interests can exist (for network security), the judgment clarifies that there is no “legitimate interest” that would override the users rights when controllers try to provide ads. This basically limits any EU controller from running personalised ads other than to users who have a freely given their (yes/no) consent.
Schrems added: “We welcome the CJEU decision. This will mean that Meta has to seek proper consent and cannot use its dominant position to force people to agree to things they don’t want.
“This is a huge blow for Meta, but also for other online advertising companies. It clarifies that various legal theories by the industry to bypass the GDPR are null and void.”
Meta ruling blows US data transfers out of the water
Meta rocked by EU data transfer block and €1.2bn fine
Meta bows to GDPR ruling to block personalised ads
Meta GDPR consent fine €4bn short, says Max Schrems
Meta the villain again as consent for ads is ruled illegal
Where will we be in 2023…with data-driven marketing?
Meta faces mega fine as ad policy is declared illegal