The European Court of Justice (ECJ) has delivered a landmark ruling that could significantly impact Meta's business model. The court determined that 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 primary revenue stream. Meta emphasized its commitment to privacy, citing billions invested in data protection measures.
Implications for Advertising and Stock Performance
The ECJ ruling also addresses the processing of sensitive information, such as sexual orientation, for advertising purposes. The court clarified that such data may only be used under specific conditions, such as when previously made public. This aspect of the decision could further restrict Meta's ability to provide personalized advertising, impacting its advertising business and, consequently, its market performance. Despite these challenges, Meta's stock showed resilience, with a 0.7 percent increase to $586.70 on NASDAQ. Analysts maintain an average price target of $574.29 for Meta stock, reflecting ongoing confidence in the company's future viability.
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