Devastated by a slew of lay-offs and financial losses, tech companies across the U.S. have struggled to stay afloat during the past year. Even Meta, the largest social media corporation in the world, dropped over 70% of its valuation since the start of 2022, plunging more than 600 billion USD. A new European Union ruling that declared Meta’s ad practices illegal only worsened the company’s troubles. Regulators have given Meta three months to outline a plan for compliance, an ultimatum that could cripple the corporation’s business prospects in the E.U.

From discriminatory personalized ads to illegally acquiring children’s data, Meta’s business model has suffered intense scrutiny — particularly in the way it relies on ads that target and often discriminate against certain demographics. But the company is not alone in its methods; targeted advertising has become increasingly popular among many tech industry leaders, from search engines to social media platforms. With access to an abundance of user data, sending directed ads to specific audiences is not only simple but immensely profitable.

Yet despite how prevalent this practice has become, the U.S. has not established any meaningful regulation against predatory advertising. The E.U., meanwhile, continues to reinforce its strict protections of user data with sweeping blows against tech giants. Deeming that Meta’s personalized ads have violated their standards is merely the newest decision in a long-standing battle against tech misuse, which previously also combatted the actions of Google and Twitter in 2022. 

European history teacher Byron Stevens explains that the United States’ inaction in initiating similar measures is due to a difference in government and the influence of lobbyists.

“[In the U.S.], companies that don’t want to lose the potential revenue that this kind of monitoring of content on their platforms would involve have financial incentive to not have this regulation,” Stevens said. “Therefore, they have successfully put a lot of money into lobbying the government to protect their business model. To [E.U. politicians], the potential loss of whatever tax revenue on the advertising industry that a company might make is far down the line.”

But the impact of advertising extends far beyond just profit. Well-crafted targeted ads can influence the way people think, especially in politics. In 2016, Facebook offered its newly developed personalized advertising services to presidential candidates Hillary Clinton and Donald Trump. And while Barack Obama also previously used social media during his presidential campaigns, the 2016 election highlighted how much the technology had developed and how powerful it could be at affecting public opinion. After winning, the Trump campaign credited its victory to better usage of Facebook.

A turning point in politics, countless campaigns quickly integrated social media marketing into their strategies, having seen how useful it could be. Besides helping politicians attract voters, social media’s ability to influence opinion proved to have a polarizing effect, pushing people’s beliefs to become more fervent and more extreme. Sophomore class council representative Jason Shim finds that these divisions extend beyond social media, tied to the fabric of our nation.

“I think that this country rewards polarization a lot,” Jason said. “We see this inherently in the governmental structure, like the primaries. Having a monetary incentive for companies to induce this polarization is very concerning because these advertisements have a huge impact on how people think subliminally or not so subliminally.”

Indeed, much of the motivation behind developing increasingly effective advertising techniques is the sheer profit generated. With every additional click and view on these ads representing greater profits, companies like Meta continually invest significant resources into their advertising. A Facebook ad, for instance, generates an average of about $1 per click, or around $12 for every thousand views. With the main profit model of social media platforms being their advertising potential, a site’s success depends directly on its ads.

But lurking under this seemingly innocuous improvement of advertising is the amount of data such advancements require. To effectively implement a targeted ad, Meta first needs to understand the personality and interests of the target user, a task which requires their personal data. Information like browsing history, time spent interacting with content and network of connections all play a role in this data-gathering process. The more accurately the corporation can use this information to understand a user, the better an algorithm can find more personalized ads for them.

In collecting this data, Meta previously infringed upon user privacies, a violation that has now prompted the recent E.U. rulings. But even if E.U. regulators prompt Meta to change their practices, the profitability of targeted advertising remains an alluring prospect for the industry at large. So in the face of this new ad reality, WiSTEM club officer Julie Shi (11) advises users to remain cautious and understand how their data is being used.

“One way that we can reinforce the positive sides of [targeted] ads is if people become more aware of the types of things that are happening with their ads and their data,” Julie said. “We should keep in mind that whatever we see on the internet and advertisements on social media is not randomly put there, it’s what was put there by a company – most likely because of your data.”