Facebook and Instagram's 'pay or consent' model comes under EU scrutiny

The European Commission has raised concerns about Meta's “pay or consent” advertising model to Facebook and Instagram users in the EU. In preliminary findings published on Monday, the regulator suggested the social media giant's approach may not be compliant with the Digital Markets Act (DMA).

Meta introduced the model in November 2023, offering EU users two options: pay a monthly fee for an ad-free experience, or continue to use the platform for free with personalized ads. But the European Commission argues that this binary choice does not offer users the same, but less personalized, option as required by the DMA.

In response to scrutiny, Meta points to its significant commitment to compliance. The company reports that more than 11,000 employees were involved in designing and implementing new systems and user controls to meet DMA requirements. Additionally, Meta claims to have spent more than 590,000 hours on engineering and technical work (the equivalent of more than 60 years of work) to implement the necessary changes.

Meta's president of global affairs, Nick Clegg, recently wrote an op-ed warning about the potential costs of tough regulation on innovation in Europe, while Meta said it had proposed lowering the costs of its subscription service but was waiting for feedback from regulators.

The European Commission is expected to conclude its investigation by March 25, 2025. If the concerns are confirmed, Meta Meta could be fined up to 10% of its global turnover, with the fine potentially doubling for repeated violations. The case highlights ongoing tensions between tech giants and EU regulators over data privacy, market competition and innovation in the digital sector.

“Our investigation is aimed at ensuring contestability in a market where gatekeepers like Meta have accumulated the personal data of millions of EU citizens for years. Our preliminary view is that Meta's advertising model is not compliant with the Digital Markets Act and we want citizens to be able to control their data and choose a less personalized advertising experience,” said Margrethe Vestager, the European Commission's executive vice-president for competition policy.

Thierry Breton, Commissioner for the Internal Market, added: “Today, Meta has taken an important step towards full compliance with the DMA. It is our preliminary view that Meta's 'Pay or Consent' business model breaches the DMA. The DMA is there to give users back the power to decide how their data is used, and to enable innovative companies to compete on an equal footing with the tech giants for data access.”

A Meta spokesperson told Variety: “Our ad-free subscriptions comply with the DMA as instructed by the European Supreme Court. We look forward to further constructive dialogue with the European Commission to bring this investigation to a close.”

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