Meta Will Decide How Painful Its Irish Gut Punch Is
The company’s core business model could be threatened if it lets users opt out of targeted ads.
Not looking forward to this.
Source: Bloomberg
Meta Platforms Inc. is used to batting away the occasional fine from European regulators as a cost of doing business. But Wednesday’s 390 million-euro ($414 million) penalty from the Irish Data Protection Commission was different. It came with a ruling that forces Facebook to change the way it asks users to agree to targeted online advertising. That could have a big impact on its most important revenue driver — presenting ads to users based on their behavior across Facebook and Instagram.
Dan Ives, an analyst at Wedbush Securities, said the ruling could be a “major gut punch” that puts 7% of Meta’s total ad revenue at risk. (That was $115 billion in 2021.) But it’s impossible to determine how painful that punch will be since so much depends on how Meta responds.