Meta finds itself navigating starkly contrasting legal landscapes. While a major US antitrust case has concluded in the company’s favor, a decisive legal blow against its advertising model has just been delivered in Europe. For investors, this divergence raises a pivotal question: to what extent will tightening European rules impact the core business, even as US legal developments provide tailwinds?
A Stock in Recovery, Yet Cautious
Shares recently closed at €566.40. This price point remains approximately 20% below the 52-week peak, despite a solid 10% rebound over the preceding month. This movement suggests the equity has distanced itself from its lows, yet persistent concerns regarding regulation and future growth continue to cast a shadow.
European Setback: Personalized Ads Under Fire
In a significant ruling with EU-wide implications, Austria’s Supreme Court declared Meta’s model for personalized advertising impermissible under the General Data Protection Regulation (GDPR). The decision, delivered on Thursday, concludes a legal battle initiated in 2014 by privacy activist Max Schrems.
The court’s central finding is that Meta’s use of user data for advertising purposes violates GDPR principles. Judges highlighted the processing of sensitive information—such as political views or health data—without explicit consent as particularly problematic. This places the very engine of Meta’s business, its hyper-targeted advertising, under intensified regulatory scrutiny in Europe.
Concrete Obligations for Meta
The ruling imposes specific requirements on the company, including:
- Providing EU users with complete access to their personal data within 14 days of a request.
- Disclosing in detail the sources of data, its recipients, and the purposes for its use.
- Refraining from using sensitive information for advertising without obtaining clear, affirmative consent.
The court dismissed arguments that full compliance was technically unfeasible. According to noyb, the privacy organization founded by Schrems, the judgment is enforceable across the EU, with potential consequences ranging from daily fines to criminal liability for company officials should Meta fail to comply.
Meta’s Response and Ongoing Risk
Meta responded by stating the case concerned past practices. A spokesperson emphasized the company has invested over €8 billion in privacy and data protection and no longer uses sensitive data for ad personalization.
However, the Austrian court clarified its judgment assesses the situation as of 2020. Consequently, even if internal systems have been updated, the risk remains for further legal challenges and potential mandatory adjustments to the current advertising model, which could affect ad efficiency in the European market.
US Antitrust Relief: A Major Case Dismissed
Contrasting with the European regulatory tightening, Meta received favorable legal news in the United States. On November 18, 2025, a federal court in Washington D.C. ruled in Meta’s favor in a Federal Trade Commission (FTC) antitrust case following a six-week trial.
The FTC had accused Meta of abusing a dominant position in “personal social networking.” The court, however, found the agency failed to prove the company holds current monopoly power.
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Market Definition Proves Decisive
A critical element was Judge James E. Boasberg’s adoption of a broader market definition than the FTC sought. Instead of focusing solely on traditional social networks, he included platforms like TikTok and YouTube as direct competitors.
Three key factors supported this view:
- User Behavior: Data indicated users readily switch between Facebook, Instagram, TikTok, and YouTube during disruptions, viewing the services as interchangeable.
- Product Convergence: Short-form video feeds powered by AI recommendations appear similar across platforms, blurring the lines between social media and video-sharing services.
- Competitive Pressure: Internal documents demonstrated Meta perceives TikTok and YouTube as serious competitors and formulates strategy accordingly.
This wider market definition reduces Meta’s calculated market share below the 70-80% threshold US courts typically associate with monopoly power. As a result, a major antitrust case seen as a potential threat to acquisitions or business model adjustments has been set aside for now.
Robust Growth Meets Heavy Investment
Operationally, Meta continues to post strong growth. Third-quarter 2025 results, published in late October, showed revenue climbing to $51.24 billion—a 26% year-over-year increase. This confirms the company’s ability to expand advertising revenue and user engagement despite regulatory disputes.
This growth strategy carries significant cost. Infrastructure investment alone, primarily for AI systems and data centers, reached $19.37 billion in Q3. Meta is clearly betting on AI-driven content and advertising as its next growth engine, but this commitment ties up enormous capital.
Despite the recent share price advance, the stock remains slightly negative for the year in euro terms and noticeably below its February high. This reflects the dual narrative of powerful operational momentum paired with persistent regulatory uncertainty.
The Regulatory Horizon: Europe in Focus
The list of unresolved issues is lengthy, with the primary challenges centered in Europe:
- Digital Markets Act (DMA): The European Commission accepted Meta’s commitment in December to offer EU users fewer personalized advertising options. Implementation is slated for January 2026 and may influence the attractiveness of its European ad inventory.
- Further US Litigation: Several cases concerning the platform’s impact on younger users are scheduled for 2026, focusing on mental health and platform design.
- Tax Scrutiny: The US Internal Revenue Service (IRS) continues to examine Meta’s international tax structures.
These opposing signals—legal relief in US antitrust law versus increased pressure on the advertising model in Europe—highlight the divergent regulatory approaches facing major tech firms globally. While the FTC victory removes a significant overhang, the Austrian GDPR ruling increases adaptation pressure on the European advertising business.
Meta’s upcoming quarterly report on January 28, 2026, will be closely watched for initial details on how the new EU mandates are affecting operations and finances, particularly whether profitability in the European ad segment is undergoing a measurable shift.
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