For the past eight months, Europeans who are uncomfortable with the way Meta tracks their data for personalized advertising have had another option: They can pay the tech giant up to €12.99 ($14) a month for their privacy.
Meta, which launched in November 2023, introduced its “pay or consent” subscription model at a time when fines, legal cases and regulatory attention have pressured the company to change the way it asks users for consent for targeted advertising. However, on Monday the European Commission rejected its latest solution, arguing that its “pay or consent” subscription is illegal under the bloc’s new digital markets law (DMA).
“Our preliminary view is that Meta’s ‘Pay or Consent’ business model infringes the WFD,” EU Internal Market Commissioner Thierry Breton said in a statement. statement“The DMA exists to give users the power to decide how their data is used and ensure that innovative companies can compete on a level playing field with technology giants on data access.”
Meta denied that its subscription model violated rules. “The ad-free subscription follows the direction of Europe’s highest court and complies with the WFD,” Meta spokesperson Matt Pollard told WIRED, referring to a July Court of Justice of the European Union (CJEU) decision. which said Meta needed to offer users an alternative to ads, if necessary for an appropriate fee. “We look forward to continuing to engage constructively with the European Commission to close this investigation.”
At a news conference Monday morning, Commission officials said their concern was not that the company was charging for a service without advertising. “This is perfectly fine for us, as long as we have the middle option,” they said, explaining that there should be a third option that could also contain ads, but would be less targeted. There are different, less targeted ways to provide advertising to users, they added, such as contextual advertising. “The consumer must be able to choose an alternative version of the service that is based on non-personalization of the ads.”
Under the DMA, large technology platforms must seek consent from users if they want to share their personal data with other parts of their businesses. In the case of Meta, the Commission said it is particularly concerned about the competitive advantage Meta receives over its rivals by being able to combine data from platforms such as Instagram and its advertising business.
Meta has the opportunity to respond to the charges issued on Monday. However, if the company cannot reach an agreement with regulators by March 2025, Brussels has the power to impose fines of up to 10 percent of the company’s global turnover.
Last week, the EU issued a series of reprimands to US tech giants. The Commission warned Apple that its App Store breaches EU rules by preventing app developers from offering promotions directly to their users. Brussels also accused Microsoft of abusing its dominance in the office software market, following a complaint from rival Slack.