This shift comes in response to a ruling by the European Union’s top court, which mandates that Meta must obtain user consent for personal data usage in ad targeting.

The new ad targeting will rely on basic demographic information such as age, location, and gender, moving away from extensive personal data tracking.

Meta Platforms has introduced a new option for Facebook and Instagram users in Europe, allowing them to choose between less personalized ads or a paid ad-free subscription.

However, the financial implications of these changes remain uncertain, as Meta anticipates that less personalized ads could negatively affect its substantial digital advertising revenue in Europe.

Users opting for the less personalized ad experience will encounter unskippable ads that display in full screen, a strategy aimed at maintaining Meta's revenue.

Despite these adjustments, Meta continues to advocate for personalized advertising, asserting its importance for a free internet and the economic benefits it brings.

The EU's regulatory body has until late March 2025 to conclude its investigation, with potential fines against Meta reaching up to 10% of its annual global revenue.

As of now, the EU has not officially endorsed Meta's new ad model, and the developments were first reported by the Wall Street Journal.

These new options will be available to users aged 18 and older across the EU's 27 member countries, as well as Switzerland, Norway, Iceland, and Liechtenstein.

This decision aligns with the EU's Digital Markets Act (DMA), which aims to regulate Big Tech and foster a more competitive environment for smaller firms.

The EU is currently investigating Meta's previous 'pay or consent' model, which was deemed non-compliant with competition rules earlier in July 2024.

Meta's recent changes reflect ongoing efforts to comply with EU regulations amid increasing scrutiny over digital competition and user privacy.