European Union regulators have accused Meta Platforms of violating the bloc’s new digital competition rules by compelling Facebook and Instagram users to either view ads or pay to avoid them. This move comes as part of Meta’s strategy to comply with Europe's stringent data privacy regulations.
Starting in November, Meta began offering European users the option to pay at least 10 euros ($10.75) per month for ad-free versions of Facebook and Instagram. This was in response to a ruling by the EU’s top court, which mandated that Meta must obtain user consent before displaying targeted ads, a decision that jeopardized Meta’s business model of personalized advertising.
The European Commission, the EU’s executive body, stated that preliminary findings from its investigation indicate that Meta’s “pay or consent” model breaches the Digital Markets Act (DMA) of the 27-nation bloc. According to the commission, Meta’s approach fails to provide users the right to “freely consent” to the use of their personal data across its various services for personalized ads.
The commission also criticized Meta for not offering a less personalized service that is equivalent to its social networks. Meta responded by stating that their subscription model for no ads aligns with the direction of the highest court in Europe and complies with the DMA. The company expressed its intent to engage in constructive dialogue with the European Commission to resolve the investigation.
The investigation was launched soon after the DMA took effect in March, aiming to prevent tech “gatekeepers” from dominating digital markets through heavy financial penalties. One of the DMA's objectives is to reduce the power of Big Tech firms that have amassed vast amounts of personal data, giving them an advantage over competitors in online advertising and social media services. The commission suggested that Meta should offer an option that doesn’t rely on extensive personal data sharing for advertising purposes.
European Commissioner Thierry Breton, who oversees the bloc’s digital policy, emphasized that the DMA aims to empower users to decide how their data is used and to ensure that innovative companies can compete fairly with tech giants regarding data access.
Meta now has the opportunity to respond to the commission’s findings, with the investigation due to conclude by March 2025. The company could face fines of up to 10% of its annual global revenue, potentially amounting to billions of euros. Under the DMA, Meta is classified as one of seven online gatekeepers, with Facebook, Instagram, WhatsApp, Messenger, and its online ad business listed among two dozen “core platform services” that require the highest level of regulatory scrutiny.
This accusation against Meta is part of a series of regulatory actions by Brussels against major tech companies. Recently, the EU charged Apple with preventing app makers from directing users to cheaper options outside its App Store and accused Microsoft of violating antitrust laws by bundling its Teams app with its Office software.