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EU Accuses Meta of Violating Antitrust Rules Over Ad-Supported Subscription Model

Confidence UbaniJuly 1, 20241 Mins read43

On Monday, the European Commission accused Meta Platforms, Inc., the parent company of Facebook and Instagram, of violating EU antitrust rules with its ad-supported subscription service.

This service, introduced in Europe last year, offered users a””pay or consen”” choice: either pay to use the platforms ad-free or consent to their data being used for personalised advertising.

TheCommission’ss preliminary findings indicate that this model forces users to agree to data processing without providing an equally functional, less personalised version of the social networks.

In the Commission’s preliminary view, this binary choice forces users to consent to the combination of their personal data and fails to provide them a less personalised but equivalent version of Meta’s social networks, regulators stated.

A Meta spokesperson defended thecompany’ss approach, saying the ad-supported model aligns with the European Court ofJustice’ss directives and complies with the Digital Markets Act (DMA).

We look forward to further constructive dialogue with the European Commission to bring this investigation to a close, the spokesperson added.

Meta implemented the contended model following a European Court of Justice ruling that allowed companies to offer an alternative service that does not rely on data collection for ads. However, the Commission argues thatMeta’ss service does not provide an equivalent option with less data use and does not allow users to consent to their data being used for targeted ads freely.

Under the DMA, large digital companies can face fines of up to 10% of their global annual revenue for violations, with the potential to rise to 20% for repeated offences.

Meta could face a penalty as high as $13.4 billion if found in breach of the DMA based on its 2023 earnings. For now, the global technology company can defend itself in writing following theEU’ss preliminary findings.

TheCommission’ss investigation into this matter launched in March alongside probes into Apple and Alphabet and is expected to conclude within 12 months.