The European Commission has levied allegations against Meta, accusing the social media giant of violating the EU’s new digital regulations through a payment model that charges users for access to ad-free versions of Facebook and Instagram.
Meta, led by CEO Mark Zuckerberg, introduced a “pay or consent” strategy last year to comply with stringent data privacy rules imposed by the European Union. Under this model, users are offered an ad-free experience for a monthly fee, ensuring their data isn’t utilized for targeted advertising. Conversely, users who opt not to pay are subjected to personalized advertisements on their social media feeds.
In a preliminary assessment released Monday, the European Commission asserted that Meta’s approach fails to meet the requirements outlined in the Digital Markets Act (DMA), which aims to regulate giant tech companies. The commission’s investigation found that the “pay or consent” model effectively coerces users into consenting to their data being amalgamated across platforms if they decline to pay. Furthermore, Meta allegedly restricts users from selecting a service that utilizes less personal data while maintaining functionality similar to the ad-supported versions of Facebook and Instagram.
“In the commission’s preliminary view, this binary choice compels users to agree to the amalgamation of their data and does not provide them with a less personalized but equivalent version of Meta’s social networks,” the commission stated.
To comply with the DMA, the commission stipulated that Meta must introduce “equivalent” versions of Facebook and Instagram that minimize the use of personal data.
A spokesperson for Meta defended the new model, asserting its alignment with the DMA and other regulatory mandates.
“Subscriptions as an alternative to advertising are a widely accepted business model across various industries, and we developed the ad-free subscription option to address multiple regulatory obligations, including the DMA. We remain committed to engaging constructively with the commission,” the spokesperson remarked.
Anne Witt, an antitrust law professor at EDHEC Business School in France, underscored that the crux of the case hinges on whether consumers genuinely consent to data collection when faced with the choice between paying for a service or using it free of charge, with the condition that Meta can compile profiles for advertising purposes.
“The commission argues that Meta should offer users a choice between a highly personalized service, where data collection is permitted, and a less personalized service, where data collection is not allowed,” Witt explained.
The commission is expected to conclude its investigation by March next year. Should Meta be found in breach of the act, it could face fines up to 10% of its global turnover, amounting to approximately $13.5 billion. Last week, the commission similarly found Apple violating the DMA for alleged anti-competitive behaviour on its app store.
