Meta forced to pay $550M over competition practices

A Spanish court has ordered Facebook owner Meta to pay 479 million euros ($552 million) to Spanish digital media outlets for unfair competition practices and infringing European Union data protection regulation, a ruling the company will appeal.

Madrid's Commercial Court said on Thursday that the compensation, to be paid out to 87 digital press publishers and news agencies, was linked to Meta's use of personal data for behavioural advertising on Facebook and Instagram.

It said the US tech giant had obtained a "significant competitive advantage" in Spain's online advertising market by unlawfully processing user data.

Meta said it disagreed with the ruling and would lodge an appeal.

"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 sent 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.

Latest in a series of European investigations into Meta

The court said Meta had violated the EU's General Data Protection Regulation, therefore also breaching Spain's antitrust law.

The complaint brought by the Spanish outlets focused on Meta's change of legal basis for processing personal data when the GDPR took effect in May 2018.

Meta shifted from user consent to "necessity for the performance of a contract" to justify behavioural advertising. Regulators later deemed that basis inadequate.

In August 2023, Meta reverted to consent as its legal basis. The judge estimated that in those five years, Meta earned at least 5.3 billion euros in profits from advertising and treated the entire amount as obtained in breach of the GDPR.

A similar claim is currently under review in France.

The ruling, which is subject to appeal, is the latest in a series of fines Meta has faced in Europe.

Last year, the European Commission fined Meta nearly 800 million euros for tying its online classified ads service Facebook Marketplace to its social network Facebook and for imposing unfair trading conditions on other online classified ads service providers.

Spain's left-wing government has also targeted Meta's alleged privacy violations, with Prime Minister Pedro Sanchez saying on Wednesday a lower house committee would investigate Meta for allegedly using a hidden mechanism to track the web activity of Android device users. Meta said it would work with Spanish officials on the issue.