Meta’s plan to offer an ad-free subscription in the European Union (E.U.) has hit a major roadblock as regulators accuse the social media giant of violating the bloc’s competition rules. The controversy centers around Meta’s “pay or consent” model, which forces users to either view ads or pay to avoid them.

The European Commission stated that this model breaches the Digital Markets Act (DMA).

“This binary choice forces users to consent to the combination of their data and fails to provide them a less personalized but equivalent version of Meta’s social networks,” the Commission explained.

Additionally, the Commission noted that gatekeeper companies must seek explicit user consent to combine their personal data across different services, such as advertising. Users who do not opt-in should still have access to a less personalized but equivalent service.

Meta’s approach, however, does not offer users a way to choose a service that uses less of their personal data. This prevents users from exercising their right to freely consent to data combination for personalized ads, according to the Commission.

“Users who do not consent should still get access to an equivalent service which uses less of their personal data, in this case for the personalization of advertising,” it added.

Meta’s Ad-Free Plan

Meta first announced plans for an ad-free option for Facebook and Instagram in the E.U., European Economic Area (EEA), and Switzerland in October 2023. This was intended to comply with the region’s strict privacy laws.

However, the tech giant has been criticized for not providing genuine choices for users. Instead, users are forced to either agree to tracking for advertising purposes or pay a monthly fee to avoid personalized ads.

“European users now have the ‘choice’ to either consent to being tracked for personalized advertising – or pay up to €251.88 a year to retain their fundamental right to data protection on Instagram and Facebook,” stated Austrian privacy non-profit noyb last year.

“Not only is the cost unacceptable, but industry numbers suggest that only 3 percent of people want to be tracked – while more than 99 percent decide against a payment when faced with a ‘privacy fee.'”

Potential Consequences

If the preliminary findings are confirmed, Meta could face fines up to 10% of its total worldwide turnover, potentially rising to 20% for systematic violations of the rules.

“Subscription for no ads follows the direction of the highest court in Europe and complies with the DMA,” Meta said in a statement shared with the Associated Press. The company added that it plans to engage in “constructive dialogue” with the Commission as part of the investigation.

Broader Implications

This development comes on the heels of a Norwegian court ruling that online dating app Grindr violated GDPR data protection laws by sharing user data with advertisers, resulting in a €5.7 million ($6.1 million) fine.

The scrutiny of Meta’s practices underscores the ongoing tension between tech giants and regulatory bodies in the E.U., as they navigate the complex landscape of data privacy and user rights.

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