Meta, the parent company of Facebook, is facing accusations of violating Europe's new digital competition rules with its 'pay or consent' advertising model. The company introduced a service called 'Subscription for no ads' last year, allowing European users to pay a monthly fee for an ad-free experience or accept personalized ads.
The European Commission has expressed concerns that this binary choice forces users to consent to the use of their personal data without providing a less personalized but equivalent version of Meta's social networks. If the Commission's preliminary findings are confirmed, Meta could face a fine of up to 10% of its global annual revenue under the Digital Markets Act, potentially amounting to $13.5 billion based on its 2023 results.
Meta has disputed the Commission's findings, stating that its subscription service aligns with European court rulings and complies with the DMA. The company looks forward to engaging in further discussions with the European Commission to resolve the investigation.
This development follows the Commission's recent accusations against Apple for breaching the DMA and ongoing investigations into Google's parent company, Alphabet. The DMA aims to promote user choice and competition by requiring dominant online platforms to provide more options for users and competitors.
European Commissioner Margrethe Vestager emphasized the importance of empowering citizens to control their data and choose a less personalized advertising experience. The Commission's senior official, Michael Koenig, highlighted the need for Meta to offer users an alternative to full ad personalization that does not rely on personal data, along with the option for ad-free subscriptions or premium features.
The Commission is expected to conclude its investigation into Meta by late March next year, as part of its efforts to ensure compliance with the new digital competition rules.
