Meta's Refusal to Sign the EU AI Regulation Code of Practice: Serious Implications for the Marketing Industry and Corporate Response Strategies

Introduction: a new conflict over AI regulation

July 18, 2025 marks a critical turning point for companies operating at the forefront of digital marketing: Meta's refusal to sign the European Union's code of practice on AI regulatory law highlights a new conflict between global technology companies and regulators.
This decision is more than just a corporate policy decision; it could have serious implications for the entire marketing industry's AI utilization strategies: the EU AI Regulatory Code of Practice rules are scheduled to enter into force on August 2, 2025, and will impose new obligations on providers of general purpose AI models (GPAI). This situation is a critical juncture for companies using AI tools in digital marketing, forcing them to rethink their compliance strategies.
Meta's Chief Global Affairs Officer Joel Kaplan describes this code of practice as "overreach" and argues that it will hinder AI development in Europe. On the other hand, major companies such as OpenAI, Anthropic, Google, and Microsoft have signed the code of practice, leaving the industry divided on the issue.

Detailed analysis of Meta's rejection of AI regulations

Background and Reasons for Rejection

Meta's refusal to sign the EU AI Regulation Code of Practice is based on a fundamental difference between its AI strategy and its approach to regulation, which Joel Kaplan strongly criticized as "Europe is heading down the wrong path on AI" and called the Code a "threat to the the development and deployment of frontier AI models in Europe and will stunt European companies looking to build businesses on top of them.
This statement indicates Meta's emphasis on maintaining a competitive edge in the European digital market. It is particularly noteworthy as representative of companies concerned that regulation will stunt innovation, especially as the use of AI technology is rapidly increasing in the marketing industry.

Specific Issues with the Terms of Practice

Ram Iyer of Meta stated, "This Code introduces a number of legal uncertainties for model developers, as well as measures which go far beyond the scope of the AI Act. He noted that the code of practice creates legal uncertainty. This is a key concern for firms looking to implement AI tools in their marketing departments.
Specifically, the regulation of general-purpose AI models is expected to have the following effects: - Restrictions on customer service chatbot functionality - Narrower scope for the use of personalization technology - Increased transparency requirements for ad serving algorithms
These restrictions could have a direct impact on the efficiency and effectiveness of digital marketing.

Comprehensive Explanation of EU AI Regulatory Law

Basic Structure and Scope of the Regulation

The EU AI Regulatory Law is designed as a risk-based AI regulation, imposing different requirements depending on the risk level of the AI system; it is set to enter into force on August 2, 2025, with a compliance deadline of August 2, 2027, for existing models.
This regulatory framework is divided into four risk categories: 1. prohibited AI systems (high risk) 2. high risk AI systems (strict requirements) 3. limited risk AI systems (transparency obligations) 4. minimal risk AI systems (basic requirements)
Many AI systems used in the marketing industry tend to fall into the limited risk or minimal risk category, while systems involved in personalization and behavior prediction may be classified as high risk.

Definition of AI Models with Systemic Risk

The EU AI Regulatory Act imposes particularly strict requirements on AI models with systemic risk. These models are defined as underlying models with computational power exceeding 10^25 FLOPs (floating point operations).
The implications for the marketing industry include: - Content generation tools that leverage large-scale language models (LLMs) - Advanced customer behavior prediction systems - Optimization engines for real-time ad bidding systems
Companies operating these systems will need to meet more stringent compliance requirements.

Copyright Protection in AI Content Training

The EU AI Regulation Code of Practice also includes provisions for copyright protection in the training of AI models. This is a particularly important consideration for companies using AI to generate marketing content.
Specific impacts are expected to include: - mandatory source verification and recording of training data - restrictions on using content without the explicit permission of the copyright holder - transparency labeling requirements for AI-generated content.
These requirements are important factors that will force a review of content marketing strategies.

Other key tech companies' response strategies

Strategic decisions by signatory companies

Major companies such as OpenAI, Anthropic, Google, Microsoft, Alphabet, and Mistral AI have made their own strategic decisions behind signing the code of practice. These companies are believed to be focusing on the following points as benefits that outweigh the costs of regulatory compliance
1. ensuring market access: guaranteeing business continuity in the EU market 2. enhancing credibility: increasing corporate credibility through regulatory compliance 3. maintaining competitive advantage: ensuring market dominance through early response
In particular, Google and Microsoft, both of which offer a number of AI solutions for the marketing industry, may find that regulatory compliance will help them gain the trust of their clients.

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