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Meta has been accused of violating European law with its 'pay or consent' model

By D. Maan, Jadetimes News

 

 

Meta's Controversial "Pay or Consent" Model

 

Facebook's parent company, Meta, has been accused of violating Europe’s new digital competition rules with its "pay or consent" advertising model. In late 2023, Meta introduced a service called "Subscription for no ads," allowing European users of Facebook and Instagram to pay up to €12.99 ($14) a month for ad free versions of these platforms. Alternatively, users could choose to accept versions with personalized ads.


 

European Commission's Preliminary Findings

 

The European Commission stated on Monday that, in its preliminary view, this binary choice forces users to consent to the use of their personal data without offering a less personalized but equivalent version of Meta’s social networks. If the Commission's provisional findings are confirmed, the EU could impose a fine equivalent to 10% of Meta's global annual revenue under the Digital Markets Act (DMA). Based on Meta’s 2023 results, this fine could amount to $13.5 billion. Meta, however, disagreed with the Commission's findings, asserting that "Subscription for no ads" complies with the DMA and follows the direction of Europe's highest court.


 

Broader Implications and Investigations

 

The EU’s announcement regarding Meta comes shortly after the Commission accused Apple of breaching the DMA by restricting app developers from directing consumers to cheaper services. Additionally, regulators are investigating Google parent Alphabet under the new law. The DMA, effective since March, mandates that dominant online platforms, known as gatekeepers, provide users with more choices and create more opportunities for competitors. Online platforms frequently collect personal data across their own and third party services for use in digital advertising.

 

Empowering User Control Over Data

 

Margrethe Vestager, a European Commissioner responsible for competition policy, emphasized that Meta has been accumulating personal data from millions of EU citizens for many years. She highlighted the Commission’s goal to empower citizens to control their own data and choose a less personalized ads experience. Michael Koenig, a senior official at the Commission, stated that Meta must offer an alternative to "full" ad personalization that does not rely on personal data, ensuring it is automatically less personalized but still available. He added that Meta is free to maintain additional options, such as a subscription to remove ads entirely or a premium features package. The Commission aims to conclude its investigation into Meta by late March next year.

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