‘Pay or Consent’ Model Meta in the Crosshairs for Breaking EU Tech Rules

By Foo Yun Chee

BRUSSELS (Reuters) – European Union antitrust regulators on Monday accused Meta Platforms of failing to comply with groundbreaking technology rules, a ruling that criticized the U.S. company’s recent payment-or-opt-in advertising model that has already drawn the ire of privacy regulators and activists.

The tech giant launched an ad-free subscription service for Facebook and Instagram in Europe last November, saying users who opted in to being tracked would get a free service that was funded by advertising revenue. They could also pay for an ad-free service.

The European Commission, the EU’s antitrust enforcer, said the binary choice violates the EU’s Digital Markets Act (DMA), which aims to curb the power of big tech companies. It sent its preliminary findings to Meta.

The company said the binary choice forces users to consent to the combination of their personal data and does not provide them with a less personalized but equivalent version of Meta’s social networks.

“We want to give citizens the power to take control of their own data and opt for less personalised advertising,” EU antitrust chief Margrethe Vestager said in a statement.

Meta said its model complies with the ruling by Europe’s highest court.

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

Meta can modify its advertising model to avoid a fine of up to 10% of its global annual turnover if it is found guilty of DMA violations. The commission has until March next year to conclude its investigation.

Activists and privacy advocates are also questioning Meta’s advertising model.

Reuters was the first to report that the EU competition law enforcer would charge Meta with non-compliance with the Digital Markets Act.

The accusation against Meta comes a week after the EU watchdog first accused Apple under the DMA of failing to comply with the new rule.

(Reporting by Foo Yun Chee; Editing by Susan Fenton)