Meta subscription launch 'not just about making money'

Meta claims that plans to launch ad-free subscription versions of both Facebook and Instagram in the EU are not about trying to claw back revenue lost over to its illegal advertising practices, they are simply addressing EU concerns.

Although the scheme will not be available in the UK, due to Brexit, from next month users in the EU, European Economic Area and Switzerland will be able to pay €9.99 (£8.72) per month for an ad-free version.

Meta said its new subscription was about addressing EU concerns, rather than making money following a €390m fine for a breach of GDPR over “forced consent”; basically consumers have to accept how their data is used or leave the platforms.

In a statement, Meta said: “We believe in an ad-supported Internet, which gives people access to personalised products and services regardless of their economic status. The option for people to purchase a subscription for no ads balances the requirements of European regulators while giving users choice and allowing Meta to continue serving all people in the EU, EEA and Switzerland.”

However, the subscription scheme has already been branded a “pay for your rights” approach by long-term Facebook critic Max Schrems, whose privacy organisation NOYB filed the original GDPR breach complaint to EU regulators.

Schrems said: “Fundamental rights cannot be for sale. Are we going to pay for the right to vote or the right to free speech next? This would mean that only the rich can enjoy these rights, at a time when many people are struggling to make ends meet. Introducing this idea in the area of your right to data protection is a major shift. We would fight this up and down the courts.”

Most observers see the strategy as part of a wider trend towards subscriptions; tech giants from TikTok to YouTube are all offering or experimenting with ad-free versions, signifying a broader move toward what they claim will be improved user experience and better privacy.

Insider Intelligence senior director of briefings Jeremy Goldman said: “Meta’s pursuit of ad-free subscriptions in Europe preempts some aspects of the forthcoming EU Digital Services Act that go into effect January 1, 2024. It’s an evident recognition of changing user consent and ad personalisation norms. Without the ability to personalise ads under the new regime, Meta believes its ad rates could drop, pushing them to monetize users via subscriptions.”

“Meta’s Average Revenue Per User (ARPU) data sheds light on the intricacies of this strategy. For the subscription model to be financially viable, its rates will need to be higher in the US than in the EU, should this model make its way across the pond.”

“There’s also an underlying tension in Meta’s move. For years, the company has extolled its personalised ads as beneficial for user experience. Offering a paid escape from these ‘benefits’ raises questions about the genuine value and intent behind such ads.

“In sum, Meta’s strategic pivot isn’t merely about revenue replacement. It’s a complex dance of finances, user satisfaction, and maintaining brand ethos amid changing regulatory and consumer landscapes.”