The European Commission has informed Meta that, based on preliminary findings, its subscription model, which requires European Facebook and Instagram users to either provide personal data to access the platform or pay to retain privacy, violates the Digital Markets Act (DMA).
People paying the subscription could use Facebook or Instagram without any ads. “While people are subscribed, their information will not be used for ads,” the company said in an Oct. 30, 2023, press release. For users who choose the free option, Meta collects their personal information to deliver targeted ads.
The commission suggested that Meta should come up with a different option for users who do not wish to subscribe.
“To ensure compliance with the DMA, users who do not consent should still get access to an equivalent service which uses less of their personal data, in this case for the personalization of advertising,” the commission said.
The commission also accused the company of not allowing users to “exercise their right to freely consent” to how their personal data is collected from Meta platforms such as Facebook, WhatsApp, Instagram, Messenger, and Marketplace and combined for use in personalized ads.
Defending the company’s decisions, a Meta spokesperson told The Epoch Times that the “subscription for no ads” model follows the “direction of the highest court in Europe and complies with the DMA.”
In December 2023, Meta noted that the Court of Justice of the European Union had ruled in July 2023 that the subscription model was an acceptable way to obtain people’s consent for the use of personal data for targeted ads.
Meta said that the EU Commission’s recent findings were only a procedural step and “not a final decision.” The company has committed “an almost unprecedented level of resources” to comply with the DMA, it said.
The firm claimed that more than six decades’ worth of engineering work had been done over a two-year period to build the systems ensuring compliance with the act.
“We look forward to further constructive dialogue with the European Commission to bring this investigation to a close,” the spokesperson said.
The company has the right to defend itself from the allegations with the investigation set to conclude by late March next year.
If the EU Commission finds Meta guilty of non-compliance with the DMA, it can impose fines of up to 10 percent of the company’s global turnover. A repeated infringement can increase the fines to 20 percent.
Meta made $134.9 billion in revenue last year, indicating that the fines could potentially be about $13.5 billion, rising to $27 billion for a repeated infringement.
In cases of systemic non-compliance, stricter punishments, such as forcing the firm to sell a part of its business, could be adopted.
Added Regulation
Meta also said in the statement to The Epoch Times that Europe’s tight regulations could hurt innovation in the region, citing a recent post by Nick Clegg, a former deputy prime minister of the UK who is now the president of global affairs at the company.“Europe is a pioneer of tech regulation—as GDPR, the DMA, DSA and AI Act demonstrate—but not yet at pioneering and deploying the tech at scale itself,” Mr. Clegg wrote.
He said that the complex regulatory requirements are making companies hesitant to roll out new products in the region, noting that Meta and Google have delayed rolling out their AI assistants.
Meanwhile, “with the rapid adoption of AI in the U.S. and China, the gap between these superpowers and the EU is widening,” Mr. Clegg added.
The commission raised concerns that the algorithms in platforms such as Facebook and Instagram, which recommend videos and posts, could result in children becoming addicted.
