Meta’s ‘Pay or Consent’ Data Model Breaches EU Law
Regulators say the tech giant breached the Digital Markets Act in requiring Instagram and Facebook users to pay if they don’t want personal data used to generate targeted ads.
European Union regulators have accused Meta of breaching the bloc’s stringent new competition rules by compelling users of Instagram and Facebook to pay to avoid having their personal data used for targeted advertising.
Margrethe Vestager, the European Commission’s executive vice president for competition policy, emphasized the importance of empowering individuals to assert control over their data and opt for less personalized advertising. She underscored this stance following the Commission’s preliminary findings, which are part of a broader investigation into Meta’s compliance with the Digital Markets Act (DMA). This landmark legislation marks the EU’s first concerted effort to rein in the dominance of tech giants.
If the European Commission confirms its initial conclusions, Meta could face fines amounting to up to 10 percent of its global annual revenue. The EU contends that Meta’s current policy, requiring payment from users who decline personalized ads, infringes on individuals’ rights to freely consent to the use of their personal data. Moreover, the company allegedly fails to provide an alternative service that uses less personal data, as mandated by the DMA.
Meta has responded to the European Commission’s accusations by asserting that its “subscription for no ads” model aligns with the requirements laid out in the DMA.
“We are eager to engage in constructive discussions with the European Commission to swiftly resolve this investigation,” the company stated.
The DMA, which came into full force in March amid widespread support from advocates aiming to curb the market dominance of major internet firms, has sparked debates over its potential impact on innovation. While proponents view it as a pivotal safeguard for consumers, critics caution against stifling innovation through excessive regulation of the internet sector.
Since its implementation, EU regulators have acted swiftly. In the same month, probes were launched into Apple, Meta, and Alphabet, with a deadline set for completing investigations within a year.
Meta introduced its pay-or-consent option for ads in the EU market in November as a demonstration of compliance with DMA requirements, emphasizing user control over personal data usage. However, regulators remain unconvinced, prompting ongoing scrutiny.
Recent actions by the EU have also included notifying Apple and Microsoft of alleged violations of antitrust regulations, underscoring the bloc’s proactive stance on enforcing its new digital rules.
