Key Points:
- EU antitrust regulators have charged Meta for non-compliance with the Digital Markets Act (DMA).
- Meta’s “pay or consent” model offers free, ad-supported service or a paid, ad-free option, which the EU says violates DMA principles.
- The Commission argues that Meta forces users to consent to data tracking without offering an equivalent non-personalized service.
- Meta claims its model complies with a European court ruling and the DMA, expressing willingness for dialogue with the EU.
Meta Platforms (META.O) has come under scrutiny by EU antitrust regulators for failing to comply with the bloc’s Digital Markets Act (DMA). The U.S. tech giant’s recently introduced “pay or consent” advertising model has sparked criticism from privacy regulators and activists. Launched in Europe last November, this model offers users a choice: consent to data tracking for a free, ad-supported service on Facebook and Instagram or pay for an ad-free experience.
The European Commission, which enforces EU competition laws, stated that Meta’s binary choice violates the DMA’s principles. The DMA aims to curtail Big Tech’s dominance by ensuring users have more control over their data and are provided with fairer service options. The Commission’s preliminary findings indicated that Meta’s model forces users to consent to their data being used for personalized ads without offering a less personalized but equivalent version of its social networks.
“We want to empower citizens to take control over their own data and choose a less personalized ads experience,” said EU antitrust chief Margrethe Vestager. The Commission believes that Meta’s approach fails to provide an adequate alternative for users who prefer not to track their data for advertising purposes.
Meta, however, defended its model, stating that it complies with a ruling from Europe’s top court. “Subscription for no ads follows the direction of the highest court in Europe and complies with the DMA. We look forward to further constructive dialogue with the European Commission to bring this investigation to a close,” a Meta spokesperson said.
If found guilty of breaching the DMA, Meta could face a fine of up to 10% of its global annual turnover. The Commission has until March next year to conclude its investigation. In the meantime, Meta may need to modify its advertising model to avoid such penalties.
Privacy activists and watchdogs have also raised concerns about Meta’s advertising practices. The charge against Meta follows a recent similar action by the EU watchdog against Apple for non-compliance with the DMA.
The EU’s actions highlight a broader regulatory push to limit Big Tech’s influence and ensure more equitable data practices. Meta may need to rethink its approach to user data and advertising in Europe as the investigation proceeds to align with the DMA’s stringent requirements.
