EU slams Meta for breaching digital laws with paid ad-free Facebook option

On Monday, European Union regulators accused Meta Platforms of violating the bloc’s new digital competition rules by forcing Facebook and Instagram users to either view ads or pay to avoid them.

To comply with Europe’s stringent data privacy regulations, Meta began offering European users the option in November to pay for ad-free versions of Facebook and Instagram. This move allows users to pay at least 10 euros ($10.75) per month to avoid ads targeted based on their personal data. This change came after the EU’s top court ruled that Meta must obtain user consent before displaying targeted ads, challenging Meta’s business model that relies on personalized advertising.

The European Commission, the EU’s executive arm, stated that its preliminary investigation indicates Meta’s “pay or consent” advertising model breaches the 27-nation bloc’s Digital Markets Act (DMA). According to the Commission, Meta’s model fails to allow users to “freely consent” to the use of their personal data from various services like Facebook, Instagram, Marketplace, WhatsApp, and Messenger for personalized ads. Additionally, it does not provide an option for a less personalized but still equivalent service.

The Commission launched its investigation shortly after the DMA took effect in March. The DMA is a comprehensive set of regulations designed to prevent tech “gatekeepers” from monopolizing digital markets, with severe financial penalties for non-compliance. One of the DMA’s objectives is to curb the dominance of Big Tech companies, which have amassed large amounts of personal data, giving them an advantage over competitors in online advertising and social media.

To comply with the DMA, the Commission suggested that Meta should offer an option that does not require sharing full personal data for advertising purposes. European Commissioner Thierry Breton, overseeing the bloc’s digital policy, stated that the DMA aims to empower users to control their data usage and ensure fair competition for innovative companies against tech giants.

Meta now has an opportunity to respond to the Commission, which must conclude its investigation by March 2025. The company faces potential fines amounting to 10% of its annual global revenue, which could reach billions of euros.

In a statement, Meta asserted, “Subscription for no ads follows the direction of the highest court in Europe and complies with the DMA. We look forward to further constructive dialogue with the European Commission to bring this investigation to a close.”

Under the DMA, Meta is identified as one of seven online gatekeepers, with Facebook, Instagram, WhatsApp, Messenger, and its online ad business among two dozen “core platform services” requiring the highest level of scrutiny.

This decision is the latest in a series of regulatory actions by Brussels targeting Big Tech companies. Recently, the EU charged Apple with preventing app makers from directing users to cheaper alternatives outside its App Store and accused Microsoft of violating antitrust laws by bundling its Teams messaging and videoconferencing app with its Office software suite.