EU set to charge Meta over ‘Pay or Consent’ model: report

UPDATE: Meta’s ‘pay or consent’ model fails to comply with the DMA, Commission finds

The European Union is preparing to charge Meta Platforms Inc., the parent company of Facebook, with violating the bloc’s digital regulations, according to a report by the Financial Times. This upcoming action follows an investigation into Meta’s “pay or consent” model, which has raised concerns among EU regulators.

Meta introduced a subscription service for Facebook and Instagram in Europe last November, offering users two options: consent to data tracking for a free, ad-supported service or pay for an ad-free experience without data tracking. Regulators are expected to argue that this model creates a false choice, effectively pressuring users into allowing their personal data to be tracked for advertising purposes due to the financial burden of the paid alternative.

The Financial Times report indicates that the European Commission’s preliminary findings will be issued this week, highlighting these concerns. Neither Meta nor the European Commission responded to Reuters’ requests for comments on the matter.

This development comes on the heels of another significant action by EU antitrust regulators, who charged Apple with breaching the bloc’s tech rules just last week. Apple faces potential fines and additional scrutiny over new fees imposed on app developers.

The charge against Apple was the first under the EU’s landmark Digital Markets Act (DMA), which aims to curb the power of major tech companies and promote fair competition for smaller firms. Violations of the DMA can result in fines of up to 10% of a company’s global annual revenue.

Margrethe Vestager, the European Union’s executive vice-president for digital policy, remarked last week that it was “surprising” that some of the world’s largest companies “do not take compliance as a badge of honour.”

She stated, “We are dealing with the biggest and most valuable companies on the planet. The DMA is not an excessive ask. It is plain vanilla to ask for a fair, open, and contestable marketplace.”