Antitrust cops criticise Meta’s ultimatum for Europeans forced to pay or opt in • The Register

European Union competition regulators have accused Meta of breaching the EU Digital Markets Act (DMA) by introducing a “pay or agree” advertising model that has been the source of complaints since it was announced last year.

The European Commission said on Monday that the Meta policy, introduced in October to comply with the DMA by allowing Facebook and Instagram users to opt out of advertising for a fee, is a decision that fails to take into account the specific requirements of the law.

“The DMA aims to give users control over how their data is used and ensure that innovative companies can compete on an equal footing with tech giants for access to data,” said Thierry Breton, EC Internal Market Commissioner and Meta’s archenemy. “Our preliminary view is that Meta’s ‘Pay or Agree’ business model violates the DMA.”

Meta charges €9.99 ($10.72) per month on the web and €12.99 ($13.94) per month on iOS and Android for those who want an ad-free experience. This pay-or-get-display offer is only available to those in the EU, the European Economic Area, and Switzerland, as we understand it.

The pricing model offers users the option to opt out of personalized advertising delivered using data collected and aggregated to create user profiles, something Meta previously pledged to stop doing in the EU without explicit user consent. The “pay or agree” model was adopted to align with the DMA’s principle of requiring explicit consent for such activity: Pay or agree for targeted advertising. Meta told us it believes it still has a point.

“The ad-free subscription is in line with the guidelines of the highest court in Europe and the DMA,” the spokesman said. Register“We look forward to continued constructive dialogue with the European Commission to conclude this investigation.”

EC doesn’t see it that way, specifically complaining about two elements of Meta’s payment or consent model. There’s no option for a service level that uses less personal data, and there’s no option for a user to explicitly opt in – or not – to have different pieces of personal data collected in a single profile.

When we asked a spokesperson what data Meta collects from paying customers in the EU, he only told us that a subscription means that personal data is not used to display ads, but that any other data is collected.

“If someone has subscribed, we still need to process the data to provide an inherently personalised service,” the spokesperson told us, adding that personal data will still be needed and used for things like determining which reels appear in a user’s feed. That’s not enough to meet the DMA, the EC said, because the binary choice presented by Meta does not include any option where the collection of personal data is reduced.

“To comply with the DMA, users who do not consent should still have access to an equivalent service that uses less of their personal data,” the EC said.

No, it’s the regulators who are wrong

It’s not as if the European Commission suddenly came out of left field with its opposition to the Meta subscription program – complaints about it have been pouring in since it was announced.

It took privacy advocates None of Your Business (noyb) just a month to challenge the case, arguing that Meta’s strategy violates EU law by charging for what the bloc considers a fundamental right.

EU consumer groups also filed complaints alleging that the “pay or agree” model violates the continent’s General Data Protection Regulation (GDPR) by offering a false choice that does not include the option of less data collection. The EU Data Protection Board later agreed, saying Meta failed to make it clear to users that their data was still being collected.

Meta seems undaunted by pressure from a range of consumer and regulatory parties, and pointed us to a blog post written last week by Nick Clegg, the company’s global president, who warns that EU regulations are stifling innovation on the continent. Yes, the same Nick Clegg who was Britain’s deputy prime minister.

“The sad fact is that the EU is no longer fertile ground for innovation and world-class companies,” Clegg wrote. “Our companies are growing more slowly, posting lower profits and falling behind their competitors in research and development, even in industries that have traditionally been Europe’s strength.”

Meta also offered to cut subscription fees by half, a spokesperson told us, but has not received a response from regulators.

The European Commission has said its investigation into Meta and its generous offer to Europeans is set to conclude within 12 months of starting in March 2024, alongside investigations into Apple and Alphabet, which also run afoul of DMA rules. Once that’s over, it remains to be seen what happens next for the Facebook giant.

Last week, the commission accused Apple of violating the DMA by implementing blocking rules in the App Store, while an investigation into Alphabet is apparently ongoing.

The European Commission refused to answer our questions, ordering us to contact Meta for information on its business model. ®