The European Commission has released preliminary findings indicating that Meta’s “pay or consent” approach for Facebook and Instagram users in Europe violates the bloc’s Digital Markets Act (DMA).
The Commission’s investigation revealed that Meta’s binary choice forces users to either consent to the amalgamation of their personal data or accept an ad-free experience at a cost of nearly €13 per month per account. According to the preliminary findings, this setup does not provide a genuinely equivalent alternative for users who opt out of data tracking.
Under the DMA, which has applied to Meta since March 7, failure to comply could lead to substantial penalties, potentially up to 10% of Meta’s global annual turnover for each confirmed violation, and even higher for repeat offenses. This regulatory framework aims to ensure fair competition by addressing advantages that dominant platforms exploit due to their market position.
The Commission contends that Meta’s significant influence in social networking enables it to gather extensive user data for targeted advertising, which could unfairly bolster its ad business compared to competitors. To rectify this, the DMA mandates that gatekeepers like Meta must obtain explicit user consent before tracking them for advertising purposes.
Key to the Commission’s argument is DMA Article 5(2), requiring gatekeepers to offer users an alternative that is free and comparable in service quality if they choose not to consent to data tracking. Meta’s provision of a paid subscription without ads does not meet this requirement, as per the preliminary findings.
Meta has responded to the Commission’s findings by defending its model, citing a previous European court ruling that acknowledged the possibility of offering a paid ad-free alternative, contingent upon necessity. However, the Commission argues that Meta has not justified the necessity for such a fee-based option, suggesting Meta could offer ad-supported services that rely on contextual rather than personal data.
The EU’s investigation into Meta’s practices under the DMA is ongoing, with Meta expected to formally respond to the preliminary findings. The Commission aims to conclude the probe within 12 months, potentially requiring Meta to revise its offerings to comply with EU regulations.
Consumer advocacy groups, including BEUC, have welcomed the Commission’s preliminary findings, urging swift enforcement to protect consumer rights under European law.
