The European Commission, the EU antitrust regulators, has charged Meta Platforms for failing to comply with the Digital Markets Act (DMA), its latest tech rules.
Meta Platforms, which owns social media platforms such as Facebook, WhatsApp, and Instagram, is under the scanner of global regulators after it introduced pay or consent advertising model. DMA was introduced with the aim of controlling the power of Big Tech in the online market place.
The US-based Meta Platforms, which generated sales revenue of $134 billion in 2023, has launched the no-ads subscription service for Facebook and Instagram in Europe last November. Meta Platforms says social media users, who consent to be tracked get a free service which is funded by advertising revenues. Or they could pay for an ad-free service.
Meta is charging up to €12.99 ($14) a month for its subscription for no ads service enabling European users of Facebook and Instagram to access ad-free versions. Any setback in Europe is critical for the digital media giant as EU is one of the leading markets for Meta Platforms.
In Europe, Meta has generated sales revenue of $8.4 billion in the first-quarter of 2024. About 308 million people in Europe used Meta’s Facebook on a daily basis in the fourth quarter of 2023, according to Statista.
The European Commission said the binary choice breaches the bloc’s Digital Markets Act. The Commission said Meta’s “pay or consent” advertising model is not compliant with the DMA.
In particular, Meta’s model:
# Does not allow users to opt for a service that uses less of their personal data but is otherwise equivalent to the “personalised ads” based service.
# Does not allow users to exercise their right to freely consent to the combination of their personal data.
To ensure compliance with the DMA, users who do not consent should still get access to an equivalent service which uses less of their personal data, in this case for the personalisation of advertising, the European Commission said.
The European Commission said the binary choice forces digital 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.
“We want to empower citizens to be able to take control over their own data and choose a less personalised ads experience,” EU antitrust chief Margrethe Vestager said in a statement.
Meta said its model complied with a ruling from Europe’s top court, Reuters news report said.
“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,” a Meta spokesperson said.
Meta can tweak its advertising model to stave off a fine of as much as 10 percent of its global annual turnover if found guilty of DMA breaches. The Commission can impose a penalty of 20 percent of its global revenue for repeated offences.
Privacy activists and privacy watchdogs have also taken issue with Meta’s advertising model.
Last week, the EU watchdog issued its charge against iPhone Apple for not complying with the new rule.
The Commission will conclude its investigation on Meta Platforms within 12 months from the opening of proceedings on 25 March 2024.
Baburajan Kizhakedath
