Meta ordered to pay 479 million euros to Spanish digital media for unfair competition

BarcelonaThe Commercial Court No. 15 of Madrid has ordered Meta to pay €479 million to 87 Spanish digital newspaper publishers and news agencies belonging to the AMI (Association of Information Media), including ARA. The ruling states that Mark Zuckerberg's multinational company gained a competitive advantage by including advertising on its Facebook and Instagram social networks using users' personal data protected by the European General Data Protection Regulation (GDPR). The decision responds to a lawsuit filed by the national digital press association, which argued that the improper use of users' protected personal data gave Meta an unfair advantage. The court ruled in favor of the association and ordered Meta to pay a multimillion-euro fine for unfair competition.

When the GDPR came into effect in 2018, Meta changed the legal basis for its advertising and abandoned the requirement for explicit user consent. This change allowed it to continue using enormous volumes of data to create user profiles without risking objection. Back in 2022, the company was sanctioned by the Irish Data Protection Commission for this practice. In fact, the Madrid court ruling suggests that if Meta had maintained consent as its legal basis, it would have avoided the infringement and claims like the AMI's would not have been successful.

Meta Ireland, the company's European headquarters, has refused to provide its Spanish business accounts to the court. This has forced the judge of the Commercial Court No. 15 of Madrid to make an estimate: he has determined that, during these five years, the multinational earned more than €5.281 billion in Spain from online advertising. Since Meta has not submitted its accounts, the judge assumes that the amount earned was actually higher, as otherwise it would have presented official results.

The five years are the timeframe from May 25, 2018, the date the European data protection regulation came into effect, to August 1, 2023, when Facebook and Instagram changed user consent. The court considers that the more than €5.281 billion billed during those years constituted a competitive advantage against the digital press in its own market.

Now, that money earned by Meta in violation of the GDPR must be distributed among the other competitors in the Spanish market: to make this distribution, the market share of the digital press during these five years has been calculated. For this, the court uses as a reference theStudy on the competitive conditions in the online advertising sector in Spain, Prepared by the National Commission for Markets and Competition.

While the resolution is not yet final, it could set a precedent in the advertising sector in Spain and throughout Europe. Meta's actions negatively impacted online advertising revenue in display (banners that appear in a digital newspaper) of the digital press, which consequently suffered a drop in advertising revenue. In other countries such as France, lawsuits similar to the one that has just been successful in Spain are already being processed against Meta.