Last year, Meta introduced a new way for users in the European Union to pay for Instagram and Facebook without seeing ads. They hoped this would solve some legal issues there.
However, now, Meta’s model is causing more problems. On Monday, European Union regulators said Meta’s plan, which costs up to 12.99 euros (about 14 dollars) a month, forces people to make a decision. Should they pay a fee, or give Meta more of their personal information for targeted ads?
Last year, Meta introduced a subscription service model to address scrutiny from regulators and lawyers about how it makes money from ads. The issue was how Meta combines data from users on Facebook, Instagram, and WhatsApp, along with info from other websites and apps, as reported by The New York Times.
Meta argues a subscription model offers a fair alternative
Meta argued that offering a subscription gave users a fair option. However, on Monday, EU regulators disagreed, saying the system didn’t really give users a choice. Rather, it forced them to pay for privacy. They said Meta’s approach broke the Digital Markets Act (D.M.A.), a new law meant to control the power of big tech corporations.
Meta is being accused of breaking Europe’s new digital competition rules over its “Subscription for no ads” service, which allows EU Facebook and Instagram users to pay up to €12.99/mo for ad-free versions. pic.twitter.com/8yrU0sVJuD
— PUPUWEB Blog (@cheinyeanlim) July 2, 2024
The D.M.A. aims to stop large tech companies from forcing users to agree to terms, such as giving away personal data, that they might not want The problem is that platforms like Instagram and Facebook are so popular that people feel they have no choice but to hand over their data or skip using them altogether, according to The New York Times.
Regulators clarified that according to the law, companies must allow users the option of not having their personal data collected. Users should still get a service that’s slightly less personalized but just as good.
“Meta’s ‘pay or consent’ business model is in breach of the D.M.A”
Thierry Breton, the European commissioner involved in drafting the law, stated, “Meta’s ‘pay or consent’ business model is in breach of the D.M.A.”
“The D.M.A. 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,” he further stated.
Meta responded in a statement, asserting that their subscription service adheres to the Digital Markets Act. The tech company expressed readiness in cooperating with European regulators during the investigation.
Recently, Nick Clegg, President of Meta, remarked that Europe’s economy is lagging due to excessive regulation. He pointed out, “Europe’s regulatory complexity and the patchwork of laws across different member states often [make] companies hesitant to roll out new products here.”