The European Court of Justice (ECJ) has delivered a landmark ruling that could significantly impact Meta's business model. The court determined that the unrestricted collection and processing of personal data for advertising purposes violates the principle of data minimization. This decision is likely to force Meta to limit its use of extensive user data for targeted advertising, potentially affecting the company's core revenue stream. Meta emphasized its commitment to privacy, citing billions invested in data protection measures.
Sensitive Data and Advertising Restrictions
The ECJ ruling also addresses the handling of sensitive information, such as sexual orientation, for advertising purposes. The court clarified that such data can only be used under specific conditions, such as when previously made public. This aspect of the decision could further constrain Meta's ability to deliver personalized advertisements, potentially impacting the company's advertising business and, consequently, its market performance. As Meta navigates these new restrictions, investors will closely monitor the company's adaptation strategies and their effect on future revenue projections.
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