Meta’s pay-or-consent model violates digital markets law, Brussels says

This article was originally published in English

The European Commission believes that Meta’s new model, which forces users to choose between a paid subscription or giving up their data for advertising targeting, does not comply with the recent Digital Markets Act (DMA).

Coming into force in March 2024, this historic European Union legislation aims to curb the abuse of power by digital giants and ensure fairer competition in the digital world.

Meta, the parent company of Facebook and Instagram, has been designated a “gatekeeper” under the Digital Markets Act (DMA) and is subject to stricter obligations.

In response to this law, Meta introduced a new targeted advertising system in November 2023 that asks users to choose between two options:

• Use the application for free but authorize the processing of personal data.
• Pay a monthly subscription to use the platform without advertising and without authorizing the processing of your data.

In its preliminary conclusions published on Monday, the Commission considers that this binary choice is not in compliance with the General Data Protection Regulation (GDPR) because it “requires users to consent to the processing of their personal data and does not offer them a less personalized but equivalent version of Meta’s social networks“.

In other words, access to app features varies based on user choice.

“Guardians may not make use of the Service or certain features conditional on users’ consent.“, specifies the Commission.

An intermediate model, in which Meta customers who do not give the green light to the processing of their data could nevertheless benefit from a similar service without targeted advertising, would be Brussels’ preferred option.

If the preliminary findings are confirmed, the Commission will have the right to adopt a decision of non-compliance which may result in fines of up to 10% of Meta’s total global turnover.

Such a scenario could be avoided if the company proposes corrective measures to align its business model with the provisions of the DMA.

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

The company offered to reduce the cost of its subscription, but “still waiting for regulatory feedback” said the spokesman.

Personal data is a gold mine for digital companies because it allows them to offer advertisers a tailor-made route to potential consumers. Meta earns more than 95% of its revenue from advertising.