Meta 'pay or consent' flayed again in new EU judgment

Brussels chiefs appear to have hammered the final nail in the coffin for Meta’s controversial “pay or consent” subscription service, after charging the tech giant with breaching the new Digital Markets Act.

The scheme, which forces Facebook and Instagram users to either pay a fee or consent to receive advertising, has already been battered by the European Data Protection Board, which has said it is in breach of GDPR data protection legislation.

And, while the UK is not involved because the subscription service is not available here, other companies are launching similar services and the UK’s Information Commissioner’s Office is currently consulting on the legality of the plans.

In preliminary findings issued on Monday, the European Commission said the “binary choice” of pay or consent forces users to agree to the exploitation of their personal data and fails to provide them a less personalised but equivalent version of Meta’s social networks.

The Commission added: “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, gatekeepers have been able to impose terms of services on their large user base allowing them to collect vast amounts of personal data.

“This has given 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 Article 5(2) of the DMA, 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.”

Meta’s “pay or consent” advertising model is not compliant with the DMA as it does not meet the necessary requirements, the Commission stated. In particular, Meta’s model 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 does not allow users to exercise their right to freely consent to the combination of their personal data.

EU internal market commissioner Thierry Breton said: “Our preliminary view is that Meta’s ‘pay or consent’ business model is in breach of the DMA. The DMA is there to give back to the users the power to decide how their data is used and ensure innovative companies can compete on equal footing with tech giants on data access.”

Meta said in a statement: “Subscription for no ads follows the direction of the highest court in Europe and complies with the DMA. We look forward to further constructive dialogue with the European Commission to bring this investigation to a close.”

Meta now has the chance to examine the documents in the Commission’s investigation file and reply in writing to the preliminary findings. The Commission will conclude its investigation within 12 months from the opening of proceedings on March 25 2024. If found in breach of the Act, Meta could be fined up to 10% of its global turnover, and up to 20% for any repeat offence.

EU executive vice-president in charge of digital policy Margrethe Vestager added: “Our investigation aims to ensure contestability in markets where gatekeepers like Meta have been accumulating personal data of millions of EU citizens over many years.

“Our preliminary view is that Meta’s advertising model fails to comply with the Digital Markets Act. And we want to empower citizens to be able to take control over their own data and choose a less personalised ads experience.”

The move follows Apple becoming the first company to be found in breach of the DMA, for “squeezing out innovative companies” by charging them for every app purchase made via its platform.

In response, Apple insisted it had made a number of changes to comply with the DMA in the past few months following feedback from developers and the European Commission investigators.