Spanish court orders Meta to pay €479m over alleged unfair advertising practices

New Delhi: A Spanish court has ordered Meta to pay 479 million euros (about $552 million) in compensation to 87 digital media organisations, ruling that the company engaged in unfair competition and breached European Union data protection rules through the way it handled user data for behavioural advertising, as per the news reports.

Madrid’s Commercial Court said the decision relates to Meta’s use of personal data across Facebook and Instagram, stating that the company had gained a “significant competitive advantage” in Spain’s online advertising market by processing user information unlawfully.

Meta said it disagreed with the outcome and would challenge it.
“This is a baseless claim that lacks any evidence of alleged harm and wilfully ignores how the online advertising industry works,” a Meta spokesperson said in a statement to Reuters.

“Meta complies with all applicable laws and has provided clear choices, transparent information and given users a range of tools to control their experience on our services,” the spokesperson added.

The case centred on Meta’s shift in May 2018, when the EU’s General Data Protection Regulation (GDPR) took effect, from using user consent as the legal basis for data processing to citing “necessity for the performance of a contract” as justification for behavioural advertising. Regulators later rejected this reasoning. Meta reverted to consent in 2023.

The judge calculated that Meta generated at least 5.3 billion euros in advertising profits during that five-year period and considered the entire amount as having been earned in breach of the GDPR. The ruling is open to appeal.

A similar legal action is currently under review in France.

The decision follows a series of regulatory penalties issued against Meta across Europe. Last year, the European Commission imposed a fine of nearly 800 million euros for practices linked to Facebook Marketplace and alleged unfair conditions for competitors in online classified ads.

In Spain, privacy concerns around Meta have also drawn political attention. Prime Minister Pedro Sánchez recently stated that a parliamentary committee would investigate allegations that Meta used a hidden mechanism to track Android users’ web activity. Meta has said it will cooperate with Spanish authorities.