Shoes for you, cycling for you: Meta fights plans to let users escape targeted ads

Meta has fired a warning shot across the federal government’s bow as it contemplates changes to privacy law that would let users opt out of targeted advertising and deal a hammer blow to the social media giant in Australia.

The US technology giant, which owns Facebook, Instagram and WhatsApp, makes almost all of its money selling ads that can be targeted to people based on things like their location, gender, age and interests. But the Attorney-General’s Department proposed letting users opt out of the practice while forcing companies to keep offering their services in a February review of the Privacy Act, which the government is now considering.

Meta privacy policy director Melinda Claybaugh, who the company flew to Australia to make its case, cast small business as the potential victims of moves against targeted advertising. She argued that big mass-market brands like car companies with deep budgets would dominate the advertising market if smaller ones could not reach their niche audiences through targeting.

“I think we would all agree… you’d rather not have a car ad all the time,” Claybaugh said. “But it’s also really not a great result for businesses, particularly small businesses [and] also NGOs that rely on targeting to reach people who are interested in their services.”

Consumers also find irrelevant ads annoying, Meta argues. The Australian Competition and Consumer Commission (ACCC) has confirmed small businesses use Meta advertising because of its effectiveness and ease, but flagged concerns about the company’s market power. Meta has also been sued in numerous jurisdictions over privacy issues.

Meta is taking a softer approach to the ad issue than its furious but unsuccessful opposition to laws forcing it to pay media companies for news content in 2021. In its submission to the government, of which Meta only released the executive summary, the company said it only opposes 10 of the 116 departmental recommendations. It backs some – including a right for individuals to sue for serious invasions of privacy – that other industries, such as traditional media, are set against.

“We think that people should be able to have a place to go to redress serious harms,” Claybaugh said. “I think that makes sense.” She would not say who she had met in Australia, though she has been in Canberra for meetings, or quantify the financial damage Meta would likely suffer if the mooted advertising changes were put into law.

Apple and Google did not respond to a request for comment on the proposed ad change, but it would not affect them to the same extent because much of their advertising is contextual. For example, a user who is Googling “new jeans” will be shown ads for pants because of the search query, not their identity.