News #Meta

Meta Faces EU Charges Over ‘Pay or Consent’ Policy

EU regulators believe Meta may leave its users no other viable option but to allow tracking their personal data for advertising purposes with its ‘pay or consent’ policy.

Meta Faces EU Charges Over 'Pay or Consent' Policy

The European Union is charging Facebook and Instagram’s parent company, Meta, for breaking the EU’s landmark digital competition rules, reported the Financial Times (FT).

The recently introduced Digital Markets Act (DMA) changed how large tech platforms should serve the EU’s 400 million internet users. The groundbreaking legislation aims to ensure a level playing field for digital companies of all sizes so that Big Tech players do not misuse their impact to create a monopoly in the field.

Apparently, Meta’s “pay or consent” model doesn’t meet the standards of giving users the choice. This policy assumes that Meta’s social media users who consent to have their personal data tracked get a free service. In this case, the no-ads subscription service for Facebook and Instagram is funded by advertising revenues. Otherwise, users should pay the provider not to have their data shared.

EU regulators suggest that many users will be compelled to consent to data sharing due to financial pressure. Therefore, Brussels regulators issued their preliminary findings on Monday, stating that the choice presented by Meta’s model might give consumers a false alternative that breaches the DMA.

The EU executive also remarked that Meta “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”.

Meta representatives responded that their no-ads subscription does comply with the DMA rules, looking to further dialogue with the EU on the subject.

Just a week ago, Apple received a similar preliminary view from the European Commission claiming that its App Store rules violate the Digital Markets Act (DMA), as they prevent app developers from freely steering consumers to alternative channels for offers and content.

EU started an investigation into the activities of technology giants such as Apple, Alphabet, and Meta in March 2024, as soon as DMA came into effect.

Companies that do not comply with the legal requirements could face fines ranging from 5% of the daily turnover to 10% of their worldwide turnover in the preceding financial year (up to 20% if repeated).

Nina Bobro

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Nina is passionate about financial technologies and environmental issues, reporting on the industry news and the most exciting projects that build their offerings around the intersection of fintech and sustainability.