The European Commission has raised concerns over Meta‘s “pay or consent” advertising model for Facebook and Instagram users in the EU. In preliminary findings released on Monday, regulators suggest the social media giant’s approach may not comply with the Digital Markets Act (DMA).
Meta introduced the model in November 2023, offering EU users two options: pay a monthly fee for an ad-free experience or continue using the platforms for free with personalized ads. However, the Commission argues this binary choice fails to provide users with a less personalized but equivalent alternative, as required by the DMA.
In response to the scrutiny, Meta points to its significant compliance efforts. The company reports that over 11,000 employees have been involved in designing and implementing new systems and user controls to meet DMA requirements. Additionally, Meta claims to have invested more than 590,000 hours of engineering and technical work – equivalent to over six decades work – to introduce the necessary changes.
Nick Clegg, Meta’s president of Global Affairs, recently penned an op-ed warning about the potential costs to European innovation resulting from stringent regulation. Meanwhile, Meta said it has offered to reduce the cost of its subscriptions service but is awaiting regulatory feedback.
The Commission will conclude its investigation by March 25, 2025. If concerns are confirmed, Meta Meta could face fines of up to 10% of its total worldwide turnover, with penalties potentially doubling for repeated infractions. The case underscores the ongoing tension between tech giants and EU regulators over data privacy, market competition and innovation in the digital space.
“Our investigation aims to ensure contestability in markets where gatekeepers like Meta have been accumulating personal data of millions of EU citizens over many years. Our preliminary view is that Meta’s advertising model fails to comply with the Digital Markets Act. And we want to empower citizens to be able to take control over their own data and choose a less personalised ads experience,” said Margrethe Vestager, European Commission executive VP in charge of competition policy.
Thierry Breton, Commissioner for Internal Market, added: “Today we make another important step to ensure full compliance with the DMA by Meta. Our preliminary view is that Meta’s ‘Pay or Consent’ business model is in breach of the DMA. The DMA is there to give back to the users the power to decide how their data is used and ensure innovative companies can compete on equal footing with tech giants on data access.”
A Meta company spokesperson told Variety: “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.”
Source Agencies
