Meta Faces EU Fine Threat Over Controversial Ad Model

Meta Platforms is facing renewed regulatory scrutiny from the European Commission over its advertising practices. The Commission issued a warning on Friday, stating the company may incur daily financial penalties if it does not bring its ad-based business model in line with the Digital Markets Act (DMA), a sweeping regulation aimed at curbing anti-competitive behavior by large technology firms.

This announcement follows a €200 million fine imposed on Meta earlier this year for failing to comply with the DMA. The Act, which came into force in March, requires dominant tech platforms—referred to as gatekeepers—to ensure that their services do not limit market access for smaller rivals or exploit users’ personal data without consent. The current warning could result in daily fines from 27 June 2025 if Meta is found to be continuously in breach.

Dispute Over Meta’s Subscription-Based Model

In November 2023, Meta introduced a new system for Facebook and Instagram users in the EU. Under this so-called “pay-or-consent” model, users must either agree to data tracking for personalized ads or opt to pay for an ad-free version of the platforms. Meta positioned this as a means of offering user choice while aligning with EU privacy standards.

Despite adjustments made to reduce the use of personal data in advertising, the European Commission stated that the updated model still violated the DMA until at least November 2024. Officials have indicated uncertainty over whether Meta’s current structure adequately satisfies the regulatory requirements, signaling that ongoing evaluation is necessary.

The Commission emphasized that failure to achieve compliance by the stipulated deadline could lead to fines of up to 5 percent of Meta’s average global daily revenue per day of infringement. Given Meta’s financial scale, this represents a potentially significant financial burden.

Meta Pushes Back Against Regulatory Pressure

Meta responded forcefully to the Commission’s stance, defending its approach as compliant and even exceeding the expectations set by the DMA. A company representative argued that the ability for users to choose between a paid, ad-free service and a free, ad-supported version is a standard business model and should not be subject to special restrictions simply because it is offered by Meta.

The company asserted that it is offering users more transparency and choice than what is typically required, suggesting that its efforts surpass the letter of the law. Meta also suggested that it is being treated unfairly in comparison to other digital firms operating under similar business models within the EU.

Commission Maintains Equal Enforcement

In response to Meta’s claims, the European Commission reaffirmed its commitment to impartial enforcement. Officials reiterated that the DMA applies equally to all qualifying large digital service providers, regardless of their country of origin or market dominance. They emphasized that fairness and uniformity are core principles in the application of the regulation across the bloc.

The Commission’s firm stance reflects its broader ambition to impose meaningful oversight on powerful online platforms. The DMA mandates increased transparency in data usage, restrictions on self-preferencing, and limitations on how user data is collected across services.