EU Finds Meta Subscription Plan Violates DMA Rules

The European Commission has provisionally found Facebook and Instagram parent Meta in infringement of the Digital Markets Act (DMA) over its “pay or consent” advertising model, introduced last year, that offers users a subscription plan to remove personalised ads.

The move comes a week after the Commission found Apple in violation of the DMA over its “steering” rules for App Store developers, the first time it had issued such a decision.

The DMA, intended to ensure large tech companies do not stifle competition, came into full effect in March.

The Commission said its “preliminary” view was that offering a “binary” choice between a subscription fee or personalised ads in effect “forces users to consent” to personalised ads and “fails to provide them a less personalised but equivalent version of Meta’s social networks”.

Free consent

Compliance with the DMA requires Meta to launch “equivalent” versions of Facebook and Instagram that use less personal data, the Commission said.

It opened its probes into Apple and Meta in March, shortly after the DMA took effect.

At issue is whether users are able to freely consent to the collection of their data for use in tailoring advertisements, something the Commission said is not currently the case.

The Commission said Meta needs to give users the choice between consenting to data collection or opting for a free version that “uses less of their personal data but is otherwise equivalent to the ‘personalised ads’ based service”.

The DMA designates major tech “gatekeepers” that are subject to stringent rules.

Gatekeepers are not allowed to make the use of a service or certain functionalities conditional on users’ consent to data collection.

‘Take control’

“We want to empower citizens to be able to take control over their own data and choose a less personalised ads experience,” said Margrethe Vestager, the Commission’s lead on competition policy.

“Subscription for no ads follows the direction of the highest court in Europe and complies with the DMA,” Meta said in a statement provided to Silicon UK.

“We look forward to further constructive dialogue with the European Commission to bring this investigation to a close.”

The Commission said it has informed Meta of the charges and the company has an opportunity to respond to its findings.

If the decision is confirmed when the probe concludes by next March the firm faces a fine of up to 10 percent of its global revenue, or about $13.4 billion (£10.6bn) based on the company’s 2023 results.