EU Accuses Meta of Violating Digital Rules with Paid Ad-Free Option

LONDON — The European Union has formally accused Meta Platforms, the parent company of Facebook and Instagram, of violating the bloc's new digital competition rules by presenting users with a choice between viewing ads or paying to opt out.

Since November, Meta has offered European users the option to subscribe to ad-free versions of Facebook and Instagram, aligning with stringent EU data privacy regulations. Desktop users can opt for a monthly subscription of approximately 10 euros ($10.50), while iOS and Android users pay about 13 euros, allowing them to avoid targeted ads based on personal data.

The subscription model was introduced following a ruling by the EU's highest court mandating that Meta obtain consent before displaying ads to users under strict data privacy laws.

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According to the European Commission, which launched its investigation shortly after the Digital Markets Act (DMA) came into effect in March, Meta's "pay or consent" approach violates the DMA. The preliminary findings suggest that Meta's model restricts users from freely consenting to the use of their personal data across its services, including Facebook, Instagram, Marketplace, WhatsApp, and Messenger, for targeted advertising purposes.

Moreover, the commission contends that Meta fails to offer users an alternative service that maintains a level of personalization equivalent to its social networks but with less reliance on personal data.

The DMA aims to curb the dominance of tech giants in digital markets by preventing them from unfairly leveraging vast amounts of user data to stifle competition. European Commissioner Thierry Breton emphasized that the DMA is designed to empower users by allowing them greater control over their data usage while fostering a level playing field for innovative companies to compete with tech giants.

Meta now has the opportunity to respond to the commission's allegations. The investigation, which must conclude by March 2025, could potentially result in fines amounting to 10% of Meta's global annual revenue, representing a substantial financial penalty.

In response to the accusations, Meta defended its subscription model, asserting that it aligns with European court rulings and complies with the DMA. The company expressed readiness to engage in constructive dialogue with the European Commission to resolve the investigation amicably.

Under the DMA, Meta is categorized as one of seven online gatekeepers, with Facebook, Instagram, WhatsApp, Messenger, and its online advertising operations among approximately two dozen "core platform services" subject to stringent regulatory scrutiny.

July 1, 2024 4:27 p.m. 440

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