EU tells Meta ‘pay or consent’ ad model breaches DMA rules

1 Jul 2024

Meta CEO Mark Zuckerberg at a keynote speech in 2019. Image: Anthony Quintano/Flickr (CC BY 2.0)

Margrethe Vestager said that the investigation aims to ensure contestability in markets where Meta gathers millions of EU citizens’ personal data over the years.

The EU has told Meta that its so-called ‘pay or consent’ advertising model does not comply with the bloc’s rules following a preliminary investigation.

In an announcement today (1 July), the European Commission said that this binary choice “forces” users to consent to the combination of their personal data and fails to provide them a “less personalised but equivalent version” of Meta’s social networks.

It is therefore deemed to be incompatible with the Digital Markets Act (DMA), landmark EU regulation that aims to crack down on anticompetitive behaviour from Big Tech companies.

The new model was first reported on late last year and later confirmed by Meta. It means EU users of Meta apps Instagram and Facebook have a choice between using the apps for free with personalised ads enabled or signing up to a monthly subscription for an uninterrupted and privacy-friendly experience.

It has been dubbed a ‘pay or consent’ smokescreen that aims to justify a massive collection of data, a practice that complainants have said is illegal under the GDPR.

The Commission said today that to ensure compliance with the DMA, users who do not consent should still get access to an equivalent service which uses less of their personal data – in this case for the personalisation of advertising.

The investigation is set to conclude by March 2025. The Commission said Meta now has the right to examine the documents in the investigation file and reply in writing.

In case of non-compliance, the Commission can impose fines worth up to 10pc of Meta’s global turnover. The fines can go up to 20pc in case of repeated infringement.

“Our investigation aims to ensure contestability in markets where gatekeepers like Meta have been accumulating personal data of millions of EU citizens over many years,” said EU competition chief Margrethe Vestager.

“Our preliminary view is that Meta’s advertising model fails to comply with the DMA. And we want to empower citizens to be able to take control over their own data and choose a less personalised ads experience.”

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Meta CEO Mark Zuckerberg at a keynote speech in 2019. Image: Anthony Quintano via Flickr (CC BY 2.0)

Vish Gain is a journalist with Silicon Republic