Meta’s decision to offer ad-free subscriptions in the European Union is facing a new setback after regulators accused it of violating EU competition rules by forcing users to choose between watching ads or paying to avoid them.
The European Commission said the company’s “pay or consent” advertising model violated the Digital Markets Act (DMA).
“This alternative would force users to consent to the integration of their personal data without offering them a less personalized but equivalent version of the Meta social network,” the Commission said.
The report also noted that gatekeeper companies would have to ask users’ permission to combine personal data between designated core platform services and other services (such as advertising), and that users who decline to opt-in would have to be able to use a comparable, but less personalized, alternative.
Moreover, Meta’s approach does not allow users to choose services that use less of their personal data, and prevents them from exercising their right to freely consent to combining data obtained from Meta’s services to serve them personalized online advertising, the Commission said.
“Users who do not consent should still have access to equivalent services that use less of their personal data – in this case ad personalisation -” he added.
Meta first announced plans for an ad-free option to access Facebook and Instagram for users in the EU, European Economic Area (EEA) and Switzerland in October 2023 as a way to comply with strict privacy laws in the regions.
But in the months since, the US tech giant has faced criticism for offering virtually no real choice to its customers, forcing them to either consent to being tracked for advertising purposes or pay a monthly fee to never see personalized ads.
“European users have the option to ‘choose’ whether to consent to being tracked for personalized ads or pay up to 251.88 euros per year to uphold their fundamental right to data protection on Instagram and Facebook,” Austrian privacy nonprofit noyb said late last year.
“Not only is the cost unacceptable, but industry figures show that only 3% of people want to be tracked, while over 99% choose not to pay the ‘privacy fee’.”
If the preliminary findings are confirmed, Meta could be fined up to 10 percent of its global turnover, with fines increasing to up to 20 percent in case of systematic violations of the rules.
“Our ad-free subscriptions are in compliance with the DMA as instructed by the European Supreme Court,” Mehta reportedly said in a statement shared with The Associated Press. He further said that he would engage in a “constructive dialogue” with the European Commission as part of its investigation.
The move comes after a Norwegian court found online dating app Grindr had violated EU GDPR data protection law by sharing user data with advertisers and ordered the company to pay a fine of 5.7 million euros ($6.1 million).
