Facebook and Instagram’s ‘pay or consent’ ad model violates the DMA, says EU

The EU has formally accused Meta of violations of its Digital Markets Act (DMA), marking its second such accusation in as many weeks. The European Commission writes in a preliminary ruling that the “pay or consent” advertising model launched last year for Facebook and Instagram users conflicts with Article 5(2) of the DMA by not giving users a third option that uses less data for ad targeting, but It is still free to use.

Regulators discovered in their investigation that Meta offers users a “binary choice” that forces them to choose between paying a monthly subscription fee to get the ad-free version of Facebook and Instagram or consenting to the ad-supported version. Where Meta runs afoul of its rules, it says, is by not allowing users to opt for a free version that “uses less of your personal data but is equivalent to the ‘personalized ads’-based service” and by not allowing that they “exercise their right to freely consent to the combination of their personal data.”

“Our preliminary opinion is that Meta’s advertising model does not comply with the Digital Markets Act,” wrote Margrethe Vestager, who leads competition policy in the region. “And we want to empower citizens to take control of their own data and choose a less personalized ad experience.”

The commission explains the part of the DMA that it believes Meta violated:

Pursuant to Article 5(2) of the DMA, gatekeepers must obtain consent from users to combine their personal data between designated core platform services and other services, and if a user refuses such consent, should have access to a less personalized but equivalent alternative. Gatekeepers may not use the service or certain features subject to user consent.

“Ad-free subscription follows guidance from Europe’s highest court and complies with the DMA,” said Meta spokesperson Matthew Pollard. On the edge in an email. “We look forward to continuing constructive dialogue with the European Commission to bring this investigation to a close.”

The commission says it has informed Meta of its allegations and has the opportunity to respond to its findings. If the Target is found to be in violation when the investigation concludes next year, the EU could fine it up to 10% of its total worldwide revenue, which for the Target could reach $13.4 billion based on its results for 2023. The penalty could increase to up to 20% if the company continues to violate the DMA.

Meta is the second company to be charged since the DMA took effect in March 2024. The commission said last week that Apple’s App Store “steering” policies do not allow for sufficient competition.