The news: Ireland’s Data Protection Commission (DPC) handed Meta subsidiary Instagram a €405 million ($403 million) fine Monday, per Insider.

Why it’s worth watching: The fine is the second-largest issued to a tech company under Europe’s GDPR data protection laws. Luxembourg fined Amazon €746 million ($877 million) for violating data privacy rules in 2021. 

• The DPC is the EU’s regulator in charge of Big Tech companies, many of which are headquartered in Ireland. 
• The watchdog says Instagram allowed children to operate business accounts on its platform. Those accounts reveal the user’s phone number and email address, exposing private data.
• The DPC also found accounts for 13- to 17-year-old users were set to “public” as a default setting in Instagram.
• Meta responded by saying, “This inquiry focused on old settings that we updated over a year ago.” The company maintains it has made changes to “keep teens safe and their information private.”
• "While we've engaged fully with the DPC throughout their inquiry, we disagree with how this fine was calculated and intend to appeal it. We're continuing to carefully review the rest of the decision," the Meta spokesperson said.

The problem: Meta and its subsidiaries are starting to rack up DPC fines. In context, the regulator fined Meta €17 million in March for failing to protect user data from external breaches, and WhatsApp was fined €225 million in 2021 for lack of transparency on how user data was shared across Meta services.

• A DPC spokesperson told Insider that full details of the ruling will be published next week.
• The DPC’s fines on Meta subsidiaries could lead to regulation from other countries whose privacy and data protection laws have similar protections.
• The fines expose the danger of multiple social media and messaging services funneling into a centralized, advertising-driven monolith.

What’s next? The litany of fines and penalties Meta faces don’t bode well for its wider metaverse aspirations.

• As the company tries to reinvent itself in virtual space, it’s already facing pushback for privacy and harassment complaints in its Horizon Worlds VR apps.
• Eroding consumer trust in Meta and its various services could have long-lasting implications that a pivot to VR can’t solve.

This article originally appeared in Insider Intelligence's Connectivity & Tech Briefing—a daily recap of top stories reshaping the technology industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.

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