The news: Meta is restructuring its European ad system under pressure from the Digital Markets Act (DMA), setting up one of the most consequential shifts to its ad targeting model in a decade, per The Economic Times.

After a €200 million ($216 million) penalty in April, Meta will give EU Facebook and Instagram users a real choice starting January 2026. Users can opt to allow full data sharing for personalized ads or limit data sharing and receive a lighter, less-tailored ad experience.

Regulators rejected Meta’s initial compromise, which offered a free tier with fewer personalized ads alongside a paid, ad-free subscription. The European Commission (EC) ruled that choice still wasn’t meaningful. The new model must give users a direct, binary decision about how their data fuels ads. Brussels will monitor uptake and impact once the system rolls out.

Why it matters: Meta’s EU ad revenues hit $21.61 billion in 2024, up 22.3% YoY—the region’s fastest growth in five years. Revenues are projected to reach $30.77 billion by 2027 per our forecast, with annual growth normalizing around 11% to 13%.

In short: Meta’s European ad engine is heating up just as regulations tighten the valve on personalized targeting.

What this means for brands: A more prominent opt-out methodology will thin Meta’s personalization signals across the EU. Expect reduced precision, heavier reliance on modeled conversions, and more pressure on creative and contextual performance.

If opt-in rates land low, platforms will prioritize privacy-safe targeting, modeled signals, and AI optimization over deterministic data.

Brands reliant on Meta or those that have deep EU campaigns should diversify targeting inputs, invest in creative that performs without deep personalization, and build measurement strategies resilient to thinner data signals.