Meta's pay or consent business model 'in breach of EU digital law'
Mobile internet
(BRUSSELS) - The European Commission sent preliminary findings Monday to Facebook owner Meta, saying that its 'pay or consent' advertising model fails to comply with the EU's Digital Markets Act.
In the Commission's view, the 'binary choice' offered 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.
Online platforms often collect personal data across their own and third party services to provide online advertising services. Due to their significant position in digital markets, larger online 'gatekeeper' websites have been able to impose terms of services on their large user base allowing them to collect vast amounts of personal data. This, says the Commission, gives them potential advantages compared to competitors who do not have access to such a vast amount of data, thereby raising high barriers to providing online advertising services and social network services.
Under the DMA's Article 5(2), 'gatekeepers' must seek users' consent for combining their personal data between designated core platform services and other services, and if a user refuses such consent, they should have access to a less personalised but equivalent alternative. Gatekeepers cannot make use of the service or certain functionalities conditional on users' consent.
In response to regulatory changes in the EU, Meta introduced in November 2023 a binary “pay or consent” offer whereby EU users of Facebook and Instagram have to choose between: (i) the subscription for a monthly fee to an ads-free version of these social networks or (ii) the free-of-charge access to a version of these social networks with personalised ads.
The Commission takes the preliminary view that Meta's “pay or consent” advertising model is not compliant with the DMA as it does not meet the necessary requirements set out under Article 5(2). In particular, Meta's model first, does not allow users to opt for a service that uses less of their personal data but is otherwise equivalent to the “personalised ads” based service; and, second, does not allow users to exercise their right to freely consent to the combination of their personal data.
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, says the Commission.