META · 10-Q · 2026Q1 · Full report

Advertising Regulatory Changes

Meta Platforms, Inc. · 2026-04-30 · Importance 59 · Surprise 60

Legislative and regulatory developments—specifically GDPR (and CJEU interpretations), the ePrivacy Directive, the EU Digital Services Act and Digital Markets Act, and U.S. state privacy laws—have limited Meta’s ability to use data signals for ad targeting and measurement. In response to European regulatory developments, Meta changed the legal basis for behavioral advertising in the EU/EEA and Switzerland from "legitimate interests" to "consent," began offering a paid no‑ads subscription, and added an option for users who remain on the free service to see less personalized (and less effective) ads. Mobile OS and browser provider changes (e.g., Apple iOS and other platform changes) have also reduced targeting and measurement capabilities. Meta states these developments have adversely affected advertising revenue, will continue to do so for the foreseeable future, and are driving investment in privacy‑enhancing technologies and AI-based ad solutions.