EU officials suggest that Meta’s paid ‘ad-free’ plan could be breaching consumer laws.
The European Commission is displeased with Meta’s business model that allows users in the EU, European Economic Area, and Switzerland to choose between using Facebook and Instagram with targeted ads for free or paying for a monthly subscription for an ad-free experience.
Officials from the Consumer Protection Cooperation (CPC) network – a group of national authorities that oversee EU consumer protection laws – have suggested that Meta may be breaching consumer law on a ‘pay or consent’ basis. The Commission, which is the executive body of the European Union, coordinates the group’s activities against Metta.
The CPC network sent Metal a letter outlining numerous ways it believes the company may be violating consumer laws. The company has 1.9. until time to respond and propose solutions to the authorities’ concerns. If CPC officials find that Meta is not taking appropriate steps to address the issues, they may take enforcement action against the company, which may include sanctions.
CPC officials have suggested that Meta misleads users by portraying its platforms as free to use if they choose not to pay for a subscription, when Meta actually monetizes their personal data by serving targeted ads. They further say that Meta “confuses users” by requiring them to go to different sections of the privacy policy and terms of service to see how their data is used for personalized ads.
Officials have also taken aim at Meta’s “imprecise terms and language” that suggest subscribers won’t see ads at all, though they may still be served “when engaging with content shared by other platform members via Facebook or Instagram.” In addition, they claim that Meta pressures users who have been using Facebook and Instagram for a long time without any payment “to make an immediate choice without giving them advance warning, sufficient time and a real opportunity to evaluate how this choice might affect their contractual relationship with Meta, because they do not give for them to use their accounts before making their choice.”
Meta introduced its “pay or opt-in” option last year in an attempt to comply with EU data protection laws while maintaining its advertising model. CPC officials say they are concerned that “many consumers may have been subjected to undue pressure to quickly opt out” of either consenting to data collection or paying a monthly fee, “for fear of immediately losing access to their accounts and network.”
This action is separate from other investigations the EU is conducting against Meta due to the “pay or consent” model. Earlier this month, the EU said that Meta had potentially breached the Digital Markets Act with this approach. If Meta is found guilty, it could be on the hook for a fine of up to 10 percent of its global annual revenue.
In addition, the commission asked the company in March for more information about the “pay or consent” model of the Digital Services Act, another law aimed at reining in the power of big tech companies. In addition, consumer rights groups have filed complaints claiming that the approach violates the EU’s General Data Protection Regulation.
