EU regulators on Monday accused social media company Meta Platforms of violating the bloc’s new digital competition rulebook by forcing Facebook and Instagram users to choose between paying to see ads or avoiding them.
Meta in November began giving European users the option to pay for ad-free versions of Facebook and Instagram as a way to comply with the continent’s strict data privacy rules.
Users can pay as little as 10 euros ($10.75) per month to avoid being targeted by ads based on their personal data.
The US tech giant introduced the option after the EU’s top court ruled that Meta must first seek consent before serving ads to users, in a ruling that has strengthened its ability to tailor ads based on individual users’ online interests and digital activity. had put its business model at risk.
The European Commission, the EU’s executive arm, said preliminary findings of its investigation showed Meta’s “paid or consented” advertising model was a breach of the 27-nation bloc’s Digital Markets Act.
Meta’s model does not allow users to exercise their right to “freely consent” to combine their personal data with personalized online ads from across its various services, including Facebook, Instagram, Marketplace, WhatsApp and Messenger. gives. The commission said.
Meta’s model also doesn’t give users the option of a service that’s less personalized but still on par with its social network, it said.
The commission started its investigation soon after the rule book, also known as DMA, came into effect in March.
It is a comprehensive set of rules intended to prevent technological “gatekeepers” from taking over digital markets under threat of heavy financial penalties.
One goal of the DMA is to rein in the power of Big Tech companies, which have collected vast amounts of personal data on their users, giving them an edge over rivals competing in online advertising or social media services. The Commission indicated that to comply with META, it would like to see an option that does not rely on a user’s full personal information being shared for advertising.
Thierry Breton, the European Commissioner who oversees the bloc’s digital policy, said, “The DMA gives users the power to decide how their data is used and ensures that innovative companies are on equal terms with tech giants on data access.” Can compete at this level.” in a statement.
Meta now has a chance to respond to the commission, which has to complete its investigation by March 2025. The company could face a fine of 10% of its annual global revenue, which could run into billions of euros.
“The ad-free subscription follows the directive of the highest court of Europe and is DMA compliant,” Meta said in a statement.
“We look forward to further constructive dialogue with the European Commission to bring this investigation to fruition.” Under the Digital Markets Act, Meta is classified as one of the seven online gatekeepers, while Facebook, Instagram, WhatsApp, Messenger and its online advertising business are among the two dozen “core platform services” that receive the highest level of regulation. Investigation is required.
Monday’s decision is the latest in a string of regulatory activity by Brussels targeting Big Tech companies.
The EU filed its first charge under the DMA a week ago, accusing Apple of preventing app makers from pointing users to cheaper alternatives outside its App Store.
It also recently accused Microsoft of violating the bloc’s antitrust laws by bundling its Teams messaging and videoconferencing apps with its widely used Office business software.
