Meta’s choice to introduce an ad-free membership in the European Union (E.U.) has encountered a fresh challenge following accusations from regulators that the social media giant violated the region’s competition regulations by compelling users to select between viewing advertisements or making payments to evade them.
The European Commission highlighted that the company’s model of “pay or agree” for advertising breaches the Digital Markets Act (DMA).
“This dual-option approach pushes users to agree to the merging of their personal information and does not offer them a less custom-made but similar version of Meta’s social networks,” mentioned the Commission in its statement.
The Commission also stressed that companies acting as gatekeepers are required to acquire users’ consent before combining their personal data across primary platform services and other functions (e.g., advertising) and that users declining this should receive an alternative less personalized but analogous service.
In addition, Meta’s tactic restricts users from selecting a service that utilizes less of their personal information, denying them the freedom to agree to amalgamating data from its offerings to deliver tailored online advertisements, according to the Commission.
“Those who decline should still have the option to use an equal service that diminishes their personal data usage, specifically for tailor-made ads,” it added.
Meta publicized its intentions to provide a subscription sans ads for Facebook and Instagram users in the E.U., European Economic Area (EEA), and Switzerland in October 2023 as a method to adhere to the strict privacy statutes in the region.
This initiative was also prompted by a ruling from the European Court of Justice last year affirming that a company can furnish an alternate version of its service not reliant on data aggregation for advertising purposes.
However, over the months, the American tech behemoth has been met with criticisms for essentially disallowing genuine choices for customers to select from, effectively compelling them to either agree to being tracked for ad targeting or financially subscribe every month to evade personalized ads altogether.
“European users now have the ‘option’ to either approve constant monitoring for tailored ads – or pay up to €251.88 annually to uphold their essential privacy right on Instagram and Facebook,” cited Austrian privacy non-profit noyb in a statement from the previous year.
“Not only is the cost unacceptable, but market data indicates that only 3% of individuals favor being tracked, while over 99% opt against a payment when faced with a ‘privacy charge.'”
If the initial findings are substantiated, Meta could face fines amounting to up to 10% of its overall global revenue, a figure that could rise to 20% for persistent violations of the regulations.
“The subscription option devoid of ads follows the directive of the top European court and conforms to the DMA,” as per a declaration from Meta shared with the Associated Press. It also stated its intent to participate in a “productive dialogue” with the Commission as part of the inquiry.
This development coincides with a Norwegian court confirming that the online dating app Grindr transgressed GDPR data protection regulations in the E.U. by sharing user information with advertisers, necessitating the payment of a €5.7 million ($6.1 million) penalty.
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