EU Challenges Meta's 'Pay or Consent' Model Under Digital Markets Act
Brussels, Tuesday, 16 July 2024.
The European Commission has issued preliminary findings against Meta, suggesting its ‘pay or consent’ advertising model may violate the Digital Markets Act. This could force significant changes in how digital platforms operate within the EU, potentially reshaping privacy and data protection norms.
Understanding the ‘Pay or Consent’ Model
Meta, formerly known as Facebook, introduced its ‘pay or consent’ model in November 2023. This system requires users to either pay a monthly fee of at least €9.99 or consent to the use of their personal data for personalized advertising. The model was designed to comply with the Digital Markets Act (DMA), which aims to ensure fair competition and protect consumers in the digital market[1].
European Commission’s Preliminary Findings
The European Commission’s preliminary findings indicate that Meta’s ‘pay or consent’ model may not comply with the DMA. The Commission argues that this binary choice forces users to consent to the combination of their personal data without offering an equivalent, less personalized version of Meta’s social networks. Consequently, this practice could be seen as a breach of the DMA, which mandates that gatekeepers like Meta must not make the use of their services dependent on user consent for data processing[2].
Potential Consequences for Meta
If found in violation of the DMA, Meta could face substantial penalties. The European Commission has the authority to impose fines of up to 10% of the company’s global revenue, which could amount to as much as €12.5 billion based on Meta’s 2023 earnings. For repeated violations, this fine could increase to 20%. In extreme cases, the Commission might even force Meta to sell parts of its business or prohibit the company from acquiring additional services[3].
Wider Implications for Digital Platforms
This investigation into Meta is part of a broader crackdown on Big Tech companies by European regulatory authorities. Similar investigations have been initiated against other major tech firms like Apple, Google, and Microsoft. These actions reflect the EU’s commitment to enforcing the DMA and ensuring that digital platforms operate in a manner that respects user privacy and promotes fair competition[4].
Future Developments
Meta has been given the opportunity to review the Commission’s preliminary findings and respond. The investigation is expected to conclude by March 25, 2025. During this period, Meta will have the chance to defend its business model and make necessary adjustments to comply with the DMA. This case could set a precedent for how digital platforms must balance monetization strategies with compliance to stringent data protection regulations[5].