More trouble for Meta in EU due to payment or consent-based advertising model

Meta is being accused by EU antitrust regulators for allegedly failing to comply with EU technology rules. This development relates in particular to the company’s recently introduced “pay or consent” advertising model in EU countries, which has already faced criticism from privacy regulators and activists. Meta launched its ad-free subscription service on Facebook and Instagram in Europe last November. This service allows users who consent to tracking to access a free service funded by advertising revenues, or they can opt for a paid ad-free experience.

The European Commission, acting in its capacity as an enforcer of EU competition rules, found that the binary choice violated the Digital Markets Act (DMA), which aims to curb the dominance of big tech companies. The commission sent its preliminary findings to Meta, arguing that the binary choice forced users to consent to the combination of their personal data and did not provide an alternative version of Meta’s social network that offered less personalized advertising but was otherwise equivalent.

“We want to give citizens the opportunity to take control of their own data and choose less personalized advertising,” Margrethe Vestager, head of the EU antitrust commission, said in a statement.

In response, Meta defended its model, citing compliance with the ruling of Europe’s highest court. “The ad-free subscription is in line with the guidance of the Supreme Court of Europe and is DMA compliant. We look forward to further constructive dialogue with the European Commission to conclude this investigation,” said a Meta spokesperson.

Meta could adjust its approach to advertising to avoid potential fines of up to 10% of its global annual turnover if it is found to be in breach of the DMA. The Commission is expected to conclude its investigation by March next year.

This accusation against Meta follows similar action taken a week earlier by the EU watchdog against Apple, another significant step in the new regulatory framework.

Last month, it became clear that Apple had decided not to include its new Apple Intelligence AI technologies in iPhones sold in the EU due to concerns about potential breaches of privacy rules under the Digital Markets Act.

EU Competition Commissioner Margrethe Vestager criticised Apple’s decision, suggesting it aims to avoid competition obligations under the DMA.