The EU Commission has raised concerns about Meta’s ‘pay or consent’ model, stating that it violates EU law by not allowing users to freely consent to their personal data being collected for advertising purposes. The Commission’s initial assessment is that Meta’s new approach does not comply with Article 5(2) of the Digital Markets Act (DMA), which requires gatekeepers to obtain user consent for combining personal data between core platform services and other services.
According to the DMA, users should have the option to refuse consent and still access an alternative service that is less personalized but equivalent. However, Meta’s pay or consent model, which was introduced in November 2023, forces EU users of Facebook and Instagram to choose between a monthly subscription for an ad-free experience or free access to a version with personalized ads. This binary choice restricts users from selecting a service that uses less of their personal data but offers similar functionality, thereby limiting their ability to freely consent to data collection for advertising purposes.
The Commission believes that Meta’s approach gives the tech giant an unfair advantage over competitors who do not have access to as much data, creating high barriers for other companies providing online advertising and social networking services. As a result, Meta must allow users who do not consent to still access a service that uses less personal data to ensure compliance with the DMA.
Moving forward, Meta has the opportunity to review the Commission’s preliminary findings and respond in writing as part of the ongoing investigation that began in March 2024. If the Commission’s views are confirmed, Meta could face penalties for non-compliance, including fines of up to 10% of its global turnover. The Commission also has the authority to impose additional remedies, such as requiring a gatekeeper to divest parts of its business or prohibiting acquisitions related to non-compliance.
Despite the ongoing investigation and preliminary findings, Meta has not yet responded to the Commission’s concerns. In addition to the current probe, Meta is also under scrutiny for alleged failures to address deceptive advertising and misinformation on Facebook and Instagram ahead of the European Parliament election in June 2024. Furthermore, Meta recently announced a pause in its plans to train large language models using public content from its platforms in the EU due to privacy concerns raised by the Irish Data Protection Commission (DPC).
Overall, the Commission is working towards a constructive engagement with Meta to ensure effective compliance with EU regulations. The outcome of the investigation will determine the next steps and potential consequences for Meta’s ‘pay or consent’ model.