EU regulators accuse Meta of antitrust violations over new ad-supported subscription

Tech giant Meta is accused of failing to comply with groundbreaking EU antitrust rules.

On Monday, regional regulators sharply criticized the company for its recently introduced ad-supported subscription service.

The EC mentioned how such an option traps users in a cleverly designed payment or consent scheme, meaning that users either have to spend a lot of money to cash out or allow the company to track them to show targeted ads.

The initiative was first implemented by the organization last year via Meta’s Facebook and Instagram apps. The investigation found that the model forces users to provide consent so that Meta can use their personal data.

Meanwhile, a company spokesperson explained in a new statement how the ad-supported model complies with the Supreme Court’s executive ruling and is therefore compliant with the Digital Markets Act.

They also explained that they were looking forward to meeting with the European Commission where they could jointly present their version of events so that the investigation could be concluded soon.

Meta also revealed that the latest contested model is a response to the EU Court’s decision, which clearly stated how the company can offer a new version of its service that does not rely on collecting data for advertising purposes.

In the past, we have seen Meta mention that such a ruling is the most important reason for introducing these types of subscription offers.

The European Commission disagreed and explained that the introduction of such models by Meta is an intelligent method that does not give users an option in terms of collecting data with less personal data. Secondly, it is equivalent to the method of using a personalized advertising service. So, in both methods it flourishes.

Regulators strongly believe that users should have the right to access in a way that uses less personal data, especially when it is clear that it will be used for advertising purposes.

The second important reason why the EU rejects such a model is that it does not give users the right to exercise their freedom to consent to the processing of their personal data by Meta in order to obtain relevant benefits through online advertising.

If Meta is indeed found guilty, it will face a hefty fine. Remember, the DMA has been in effect since March 2024. So the law aims to crack down on any tech giant that engages in anti-competitive behavior while also keeping options open for major rivals in the industry.

As recently announced, fines can amount to up to 10% of a company’s annual revenue, and in case of repeated violations, this amount can double.

As for Meta, if it did indeed violate the DMA, it could be subject to fines of more than $13.4 billion, depending on the company’s financial performance in a given year.

Now that Facebook’s parent company has received the preliminary findings of the investigation, the company will have a chance to present its defense in writing.

The EU investigation was first launched in March, at the same time as two other similar investigations into leading technology companies such as Apple and Alphabet. The investigation is expected to be concluded within 12 months of the start of the proceedings.

Photo: DIW-Aigen

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