Meta’s plans to comply with evolving EU law and offer EU users a way to opt out of advertising and related data tracking could ultimately result in hefty fines.
Today, the EU Commission banned Meta’s ad-free subscription plans. Unable to comply Digital Markets Act (DMA)European social media users It gives you more control over how your personal data is recorded and used on social platforms.
Meta launches ad-free subscription packages It was introduced in Europe in November last year, allowing EU users to pay a fee to completely opt out of advertising and data tracking. 9.99 euros per month. Conceptually, this would allow Meta to avoid financial penalties in complying with the new law by replacing lost advertising revenue with direct payments from users, while also giving them the options they need to avoid data tracking.
but Privacy activists say Meta’s proposal is actually Weakening the focus of GDPRand protection against “data capitalism” and the European Data Protection Commission It called for an investigation into the recruitment and whether it complies with the new law.
Meth was found to be in violation of the DMA, which would have resulted in the company receiving up to $100,000 in damages. 10% of global sales.
According to the EU Commission:
“The European Commission has taken the preliminary view that Meta’s “pay or consent” advertising model does not comply with the DMA, as it does not meet the necessary requirements set out in Article 5(2). In particular, Meta’s model does not allow users to select services that use less personal data. However, otherwise it is equivalent to a “personalized advertising” based service, and does not allow users to exercise their right to freely consent to the combination of their personal data.”
At issue there is the fact that Meta is trying to charge users to access the app without data tracking, which the EU Commission says violates the DMA regulation, which stipulates that users should be able to access the same experience without having to submit any personal data.
That is unlikely to stand up in a legal challenge.
A key factor here seems to be business loss and the inhibition of companies’ ability to operate in compliance with these new regulations. Meta’s ad-free subscription service allows users to use the app without submitting any information, but Meta will likely argue that it should not be financially penalized for this option. It may argue that it should be penalized because by removing more granular ad targeting it will no longer be able to provide the same level of ad performance and would lose advertising partners.
So Meta’s option is to charge through a subscription model, but notably, this won’t cover the amount of money lost per user through advertising.
In fact, Meta already offers cheaper versions of its ad-free subscription packages to appease EU regulators, but now the European Commission is trying to force Meta into a situation where it will have to lose revenue in order to comply with these rules.
Whether it will stand up to legal scrutiny remains to be seen, but on the other hand, the EU Commission has already backed the challenge, which may not bode well for Meta’s case.
Either way, Meta’s ad-free subscription service may soon be phased out in the EU, but I suspect Meta can at least avoid fines by arguing that it was making good faith efforts to meet these requirements.
But it could prove costly for Zuckerberg and co. We’ll see what happens next.
