Tech giant Meta’s (NASDAQ:META) woes do not seem to end. The latest blow came from Europe, as European Union regulators ruled against forced personalized ad displays on Meta’s social media platforms, Facebook and Instagram.
Following the report, shares of Meta plunged 6.8% by market close, Tuesday. Shares of other social media platform providers reliant on digital ad revenues, like Alphabet (NASDAQ:GOOGL), Snap (NYSE:SNAP), and Pinterest (NYSE:PINS), also declined 2.51%, 6.7%, and 5.1%, respectively.
Meta’s AI-powered targeted ad model involves running personalized ads based on the users’ digital activity on its own platforms, without their consent. Nonetheless, the company enables users to opt out of personalized ads based on their digital activities on other platforms and search engines.
According to internal sources, a board of EU privacy regulators unanimously approved the decision to impose the option for users to choose. The development was reported by the Wall Street Journal.
Although the decision can be appealed, its upholding can lead to Meta losing access to significant information and audience-building power, if most users decide not to view targeted ads. Moreover, a bulk of Meta’s revenue comes from personalized advertising, which will clearly take the hit.
Will Meta Stock Go Up?
Wall Street analysts predict META stock to grow 29% on average over the next 12 months and hit a $147.24 average price target. Moreover, the stock has a Moderate Buy consensus rating based on 26 Buys, nine Holds, and three Sells.
