Instagram, Facebook illegally used data to create better targeted ads, court rules

A Madrid court has ordered Meta, the parent company of Facebook and Instagram, to pay €479 million ($551 million) to 87 Spanish digital media outlets and news agencies for unlawfully using personal data to gain an advertising advantage, the court said Thursday.

The mercantile court ruled that Meta extracted and used protected user data in violation of EU law to build more effective targeted ads, giving the company what the judge described as an “illicit” and “significant” competitive edge.

“The unlawful processing of this enormous volume of personal data gave Meta a competitive advantage that the Spanish digital press could not match,” the ruling said.

Spain’s judiciary said the decision—not yet final—could reshape the country’s advertising market, noting that local outlets had to compete against behavioral ads derived from data collected across Facebook, Instagram, and users’ activity, not only from Meta’s own websites but also from other pages users visited.

The court found that once EU data rules took effect in May 2018, Meta switched from a consent-based model to “contractual necessity,” a legal basis the judge deemed invalid for personalized advertising.

The ruling also criticized Meta Ireland for refusing to provide revenue figures for Spain.

The judge accepted estimates from media association AMI, concluding Meta earned more than €5.281 billion in Spain from personalized ads during the five-year infringement period. Because the income was generated illegally, the court said it must be redistributed to affected competitors, including the digital press.

Meta’s conduct, the court added, harmed the sustainability of Spanish outlets that rely on display advertising.

Meta said it will appeal.

“This is a baseless claim that lacks any evidence of alleged harm and ignores how the online advertising industry works,” the company said in a statement sent to the media, insisting that it complies with all applicable laws.???????

The court noted that Meta had already been sanctioned in Ireland in 2022 for improper data use and said the case could have implications across the EU, where Facebook and Instagram operate uniformly. (AA)