Meta’s ‘pay or agree’ ads breach competition law, says EU

The preliminary findings are part of a longer investigation into whether the social media giant has failed to comply with the EU’s Digital Markets Act, or DMA, the first antitrust law focused on big tech companies in a major economy. Meta could be fined up to 10 percent of its annual global revenue if the commission upholds that position in its final decision.

The EU said that requiring users to pay if they did not want personalized advertising did not give them the right to freely consent to the use of their personal data and that the company had not offered them an equivalent service using less of their personal data as required. DMA Act.

Meta, in a statement, said it believes its “ad-free subscription” model complies with the DMA.

“We look forward to continued constructive dialogue with the European Commission to conclude this investigation,” the company said.

The DMA went into full force in March, with supporters hailing it as a landmark law that would stop big internet companies from abusing their market power to the detriment of consumers. Critics warned that overregulating the internet sector would have a chilling effect on innovation.

Since then, EU regulators have acted quickly. In the same month that the DMA came into force, the EU opened investigations into Apple, Meta and Alphabet, setting a deadline of one year to complete the investigations.

Meta introduced a “pay or consent” option for ads in the EU market in November, in a show to EU regulators that it was meeting DMA requirements to give users control over how their personal data is used. Regulators were apparently unconvinced.

In recent days, the EU also informed Apple and Microsoft that their business practices violated antitrust laws.