EU accuses Meta of breaching digital marketing act with paid ad-free option

The European Commission has accused social media company Meta Platforms of breaching the bloc’s new digital competition regulations by forcing Facebook and Instagram users to either view ads or pay to skip them.

In response to regulatory changes in Europe, Meta introduced in November 2023 a binary “pay or consent” offer whereby EU users of Facebook and Instagram have to choose between the subscription for a monthly fee of US$11.61 (10.75 Euros) to an ads-free version of these social networks or the free 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 Digital Marketing Act (DMA) as it 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. 

The commission also believes the feature does not allow users to exercise their right to "freely consent" to the combination of their personal data from various services such as Facebook, Instagram, Marketplace, WhatsApp, and Messenger for personalised ads.

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, said the European Commission. 

The commission has given Meta the opportunity to defend by examining the documents in the commission's investigation file and replying in writing to the commission's preliminary findings. The commission will conclude its investigation within 12 months from the opening of proceedings on 25 March 2024.

In case of non-compliance, the commission can impose fines up to 10% of Meta's global revenue. Such fines can go up to 20% in case of repeated infringement.

Margrethe Vestager, executive vice-president in charge of competition policy, European Commission, said: “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. And we want to empower citizens to be able to take control over their own data and choose a less personalised ads experience.”

Thierry Breton, commissioner for internal market, European Commission, said: “Today we make another important step to ensure full compliance with the DMA by Meta. 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.”

In response, a Meta spokesperson told MARKETING-INTERACTIVE that 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.”

Don’t miss: Meta should allow users to opt out of targeted advertising for free, says EU privacy watchdog

Earlier in April this year, the European Data Protection Board (EDPB) told Meta that by offering users a choice between consenting to the processing of personal data for behavioural advertising purposes or paying a fee, namely the “pay or consent” model, will not be possible for large online platforms to comply with the requirements for valid consent.

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