Social media giant Meta (META) announced that it will stop selling and showing political ads in the European Union starting in October. This decision is a response to the EU’s new law called the Transparency and Targeting of Political Advertising (TTPA). In a blog post, Meta said that the rules create too much complexity and legal uncertainty for advertisers and platforms. As a result, the company argued that the changes required to comply with the law would make its ad service far less useful for both advertisers and users.
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It is worth noting that the TTPA, which was passed by the European Commission in 2024, requires political ads to include clear labels and information about who paid for them, what election or referendum they relate to, how much they cost, and how they were targeted. The law also restricts the use of personal data in these ads. Indeed, advertisers must get explicit consent to use people’s data for political purposes, and certain sensitive information, like someone’s racial or political background, cannot be used at all.
Therefore, after months of discussions with EU regulators, Meta decided that complying with the law would either mean redesigning its services in a way that would hurt advertisers or simply ending political ads in the region. Unsurprisingly, Google (GOOGL) has raised similar concerns and will also stop selling political ads in the EU by October. This is yet another clash between Big Tech and the EU, which has already introduced strict rules on AI, online advertising, and competition in an attempt to limit the power of major tech platforms.
Is Meta a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on META stock based on 41 Buys, four Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average META price target of $759.76 per share implies 5.5% upside potential.
