EU ACCUSES META OF VIOLATING DIGITAL COMPETITION RULES BY USING A ‘PAY OR OK’ MODEL

Tue 02 July 2024:

The European Commission (EC) has charged Meta with violating the EU’s Digital Markets Act (DMA) through its new “pay or consent” advertising model. This charge follows the tech giant’s introduction of a no-ads subscription service for Facebook and Instagram in Europe last November. The EC’s action is the latest in its ongoing efforts against Big Tech since the DMA’s implementation earlier this year.

Meta’s current model offers users the option to either consent to targeted ads based on their personal data or pay to avoid them. This approach was introduced after the EU mandated that Meta must obtain user consent before displaying ads, challenging Meta’s business model that relies on tailoring ads to individual users’ online activities and interests.

However, the EC contends that this binary choice does not allow users to “freely consent” to the use of their personal data from various Meta-operated platforms. Preliminary investigations also revealed that Meta fails to offer a less personalized yet equivalent version of its social networks.

“We want to empower citizens to be able to take control over their own data and choose a less personalised ads experience,” stated EU antitrust chief Margrethe Vestager.

Violations of the DMA could result in fines up to 10 percent of a company’s global annual turnover.

Meta responded, “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.”

The Commission has until March next year to conclude its investigation. Privacy activists and watchdogs have also expressed concerns over Meta’s advertising practices.

Series of Probes

The charge against Meta is part of a broader series of EC actions targeting Big Tech, a trend that has intensified since the DMA’s enactment in March. Last week, the EU watchdog charged Apple with breaching DMA rules through its App Store policies. In May, the EC began investigating Meta over child safety concerns on Facebook and Instagram. Additionally, Meta was compelled to enhance safety features on its misinformation tracking tool CrowdTangle ahead of the European Parliament elections in June.

In September 2023, the EU identified 22 “gatekeeper” services operated by companies including Alphabet, Amazon, Apple, Meta, Microsoft, and ByteDance. These services were given six months to comply with the DMA. Meta and TikTok appealed their gatekeeper status, with TikTok losing its appeal in February. Apple stated in April that it would continue engaging with the EC to comply with the regulations.

SOURCE: INDEPENDENT PRESS AND NEWS AGENCIES

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