When Meta introduced a subscription option last year that would allow users in the European Union to pay for an ad-free experience on Instagram and Facebook, it aimed to address regulatory issues the company was facing in the region.
The plan, however, created new legal headaches.
On Monday, European Union regulators said the Meta subscription, which costs up to 12.99 euros a month, amounted to a “pay or consent” scheme that required users to choose between paying a fee or handing over more data. to Meta for use in targeted advertising. .
Meta introduced subscriptions last year as a way to address regulatory and legal scrutiny of its advertising-based business model. Most concerning was the combination of data collected by the company about users across its different platforms, including Facebook, Instagram and WhatsApp, along with information scraped from other websites and apps.
Meta argued that by offering a subscription, users had a fair alternative.
But regulators said Monday that the system was not an option, forcing users to pay for privacy. Authorities said Meta’s policy violated the Digital Markets Act, a new law aimed at reining in the power of the biggest tech companies.
The law, known as DMA, aims to prevent big tech companies from using their size to force users to agree to terms of service they would otherwise reject, including the collection of personal data. The concern was that platforms like Instagram and Facebook are used so widely that people have to choose between handing over their data or not joining at all.
Regulators said the law requires companies to allow users to opt out of having their personal data collected while still getting a “less personalized but equivalent alternative” to the service.
“Meta’s ‘payment or consent’ business model violates the WFD,” said Thierry Breton, the European commissioner who helped draft the law. “The DMA is there to give users back the power to decide how their data is used and ensure that innovative companies can compete on a level playing field with tech giants on data access.”
In a statement, Meta said the subscription service was in compliance with the Digital Markets Act and would work with European regulators to resolve the investigation.
Last week, Nick Clegg, chairman of Meta, said Europe was falling behind economically because of excessive regulation. “Europe’s regulatory complexity and the patchwork of laws across member states often make companies hesitant to launch new products here,” he said.
Monday’s announcement is one more step in a longer process. The European Commission, the executive arm of the 27-nation bloc, has until March to complete its investigation. If she is found guilty, Meta could face fines of up to 10 percent of her global income and up to 20 percent for repeat offenses.
Meta is the second company to face charges under the Digital Markets Act. Last week, the commission filed charges against Apple for unfair business practices related to the App Store.