03 / July / 2024 : 16-29
Meta accused of breaking European law with its ‘pay or consent’ model
Facebook parent Meta has been accused of breaking Europe’s
new digital competition rules over its “pay or consent” advertising model.
Late last year, Meta (META) launched a
service called “Subscription for no ads,” allowing European users of Facebook
and Instagram to pay up to €12.99 ($14) a month for ad-free versions. The
alternative is to accept versions with personalized ads.
The European Commission said in a statement Monday
that, in its preliminary view, “this binary choice forces users to consent to
the (use) of their personal data and fails to provide them a less personalized
but equivalent version of Meta’s social networks.”
If the provisional findings of the Commission’s
investigation are confirmed, the EU could hit Meta with a fine equivalent to
10% of its global annual revenue under its landmark Digital Markets Act. Based
on the company’s 2023 results, that would
amount to $13.5 billion.
Meta said it didn’t accept the Commission’s
findings.
“’Subscription for no ads’ follows the direction of
the highest court in Europe and complies with the DMA,” a spokesperson told
CNN. “We look forward to further constructive dialogue with the European
Commission to bring this investigation to a close.”
The EU announcement comes a week after the
Commission accused Apple (AAPL) of breaching the DMA
by preventing app developers from freely directing consumers to cheaper
services. The regulators are also investigating Google parent Alphabet (GOOGL) under the new law.
The DMA, which came into force in March, requires
dominant online platforms — so-called gatekeepers — to give users more choice,
and rivals more opportunities to compete. Online platforms often collect
personal data across their own and third-party services and use it in digital
advertising services.
The Commission is due to conclude its probe into Meta by late March next year.
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