Last year, Meta introduced a service named ‘Subscription for no ads,’ offering European users of Facebook and Instagram an ad-free experience for up to €12.99 ($14) per month. Alternatively, users could opt for versions with personalized ads.
On Monday, the European Commission preliminarily criticized this binary choice, arguing it coerces users into consenting to the use of their personal data without providing a less personalized but equivalent alternative.
If the Commission’s findings hold, Meta could face a fine up to 10% of its global annual revenue under the Digital Markets Act, potentially totaling $13.5 billion based on 2023 results. Meta, however, contests these allegations, asserting its service aligns with European legal precedent and complies with the DMA.
This announcement follows the Commission’s recent accusations against Apple for allegedly violating the DMA by restricting app developers from directing consumers to lower-cost alternatives. Alphabet, parent company of Google, is also under investigation.
The DMA, effective since March, mandates that dominant online platforms, termed gatekeepers, offer users more choices and create fairer conditions for competition. These platforms commonly gather personal data across their services and third-party sources for digital advertising purposes.
In a recent statement, Margrethe Vestager, the European Commissioner overseeing competition policy, expressed concerns over Meta’s extensive collection of personal data from millions of EU citizens spanning several years. She emphasized the need to empower citizens by enabling them to control their data and opt for less personalized advertising experiences.
Michael Koenig, a senior official at the Commission, emphasized that Meta should provide users with an alternative to fully personalized ads that does not rely on personal data, ensuring a less personalized but still available option. He suggested Meta could maintain a third option of ad-free subscriptions or a fourth option with premium features.
The Commission plans to conclude its investigation into Meta by late March of the following year.
