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Discussion Paper

Compliant Use of Personal Data for Advertising on Social Networks in Europe

The passage of the Digital Markets Act (DMA) in the European Union has created a new regulatory regime impacting digital markets. This paper examines one set of new obligations for digital gatekeepers who use personal user data to monetize online content. The company at the forefront of current enforcement efforts is Meta.

Given the ongoing investigations into Meta’s conduct with regard to the use of personal data, we offer a model of compliance for the company to preserve its business model in alignment with current European Union law. We first specify the requirements for user consent to process data under European Union law.

We then examine Meta’s current compliance efforts, identifying issues with conflating advertising with data processing, obscuring user choices, and coercing users into higher data sharing. We conclude offering a structure for consent-based ad personalisation with limited data, and allow users to opt into higher or lower sharing preferences.

One of the key advantages of the model is creating incentives to compensate users for access to their personal data, which opens new possibilities for competitive and safe data economies. Such a future would offer many benefits and opportunities for European consumers and entrepreneurs.