Europe takes action against Meta over Facebook subscription model
The European Commission is reportedly about to launch a formal investigation into Instagram and Facebook’s new ad-free subscriptions. The fine could amount to billions of euros.
The investigation would be for violation of the Digital Markets Act (DMA). Meta allegedly abused its market power by not giving European consumers free choice, but pushing them into a corner.
Last year, Facebook offered the choice to subscribe so that you no longer see advertising or to keep seeing advertising in exchange for behavioural and personal data for it – the so-called ‘pay or ok’ model.
Strictly speaking, Meta has to ask its users whether or not they want to give up profile information for advertising purposes. The problem with that is that right now onlly about 10% are willing to pay for the service. This is the breaking point on which the EC investigation will focus.
The Consumers’ Association and 18 other European consumer organisations filed a complaint about Meta’s new ad-free subscriptions in late November. “The choice between a free or paid version of Instagram or Facebook is misleading, unfair and aggressive,” the unions said.
Civil rights organisation noyb already filed a privacy complaint in November 2023 with the regulator in Austria over Instagram and Facebook’s new ad-free subscriptions. That the complaint is on the table may not surprise Meta. The Digital Markets Act has been in effect since March 2024.
That Facebook subscription costs at €9.99 per month. Noyb argues that if all app developers offered such an advertising-or-paying-deal that would leave consumers financially drained. On average, someone has 35 apps on their phone. Those who then want to keep their phones as private and clean as possible would have to pay close to €9,000 a year.
If the European Commission finds Meta guilty, the fine could amount to 10% of the group’s turnover. Based on figures for 2023, that would result in a fine of $13.4 billion. Europe must publish its initial findings within no more than 12 months of the start of the investigation.
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