European probes into Facebook's privacy policies and the threat of more regulation could "derail" the social networking company's future revenue growth, a report claims.
Facebook's advertising relies heavily on collecting data about its users in order to present targeted ads. But this has raised the suspicions and concerns of many of the European Union's (EU) member states.
Government privacy watchdogs from countries including Spain, Italy, France and Germany are investigating the way in which Facebook handles users' data. While no major fine or piece of regulation has been introduced, eMarketer said revenue growth could be under threat.
"This situation will play out over the coming months and years, and its impact on Facebook's ad business could be substantial if the company was forced to limit or curtail some of its targeted advertising activities," the digital research firm said in a note on Monday.