Tuesday, July 16, 2024

Meta accused of breaking EU digital law by charging for ad-free social networks

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The European Commission has accused Mark Zuckerberg’s Meta of breaching the EU’s new digital laws with an advertising model that charges users for ad-free versions of Facebook and Instagram.

Meta launched a “pay or consent” model last year in an effort to comply with the bloc’s data privacy rules, under which users pay a monthly fee for an ad-free version of Facebook or Instagram that does not use their personal data for advertising purposes. If users do not pay, their data is used to tailor personalised adverts that appear in their social media feeds.

The European Commission, the EU’s executive body, said the model did not comply with the Digital Markets Act (DMA), which is designed to rein in big tech companies. The commission issued preliminary findings from an investigation into “pay or consent” on Monday and found the model “forces users to consent” to their data being collected from multiple platforms if they don’t want to pay. Meta also does not allow users to choose a service that uses less of their data but is broadly similar to the “with adverts” versions of Facebook and Instagram, the commission said.

“In the commission’s preliminary view, this binary choice forces users to consent to the combination of their personal data and fails to provide them a less personalised but equivalent version of Meta’s social networks,” it said.

It said in order to comply with the DMA, Meta must launch “equivalent” versions of Facebook and Instagram that use less personal data.

A Meta spokesperson said the new model had been designed to comply with the DMA and other regulatory demands.

“Subscriptions as an alternative to advertising are a well-established business model across many industries, and we designed subscription for no ads to address several overlapping regulatory obligations, including the DMA. We will continue to engage constructively with the commission,” they said.

Anne Witt, a professor of antitrust law at EDHEC Business School in France, said the key question behind the case is whether consumers “freely consent” to their data being collected when the choice is either to pay for a service or use it free of charge, but with the caveat that Meta is then allowed to build profiles of them for advertisers.

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“The commission is arguing that Meta should give users a choice between a highly personalised service for which it is allowed to collect user data and a less-personalised service for which it may not collect users’ data,” she said.

The commission must finish its investigation by the end of March next year and Meta faces a fine of up to 10% of global turnover – equivalent to $13.5bn (£10.5bn) – if it is deemed to have breached the act. The commission said last week that Apple had breached the DMA by restricting competition on its app store.

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