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Are You Being Paid for Your Personal Data? EU Court Case Challenges Meta's Business Model


This post outlines how VAT on data payments from consent-or-pay models challenges social media firms, forcing them to pay tax or rethink data-driven business models.

The enormous VAT bill that Italian tax authorities have presented to Meta, based on the estimated value of the data that they have received from users in return for their services, has recently been in the news. While the judgment was viewed by many as a step back in privacy protection, it looks as if it may be a powerful tax weapon against internet giants who have hitherto been slipping through the cracks in VAT law. Italy began a tax investigation into Meta in 2023, and concluded that it was liable for around 800 million euros in unpaid VAT on the value of the data it has received from users in Europe.

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