Meta’s ‘pay or consent’ model violates EU competition rules, according to the Commission’s findings

The European Commission has preliminarily found that Meta’s “pay or consent” approach for Facebook and Instagram users in Europe does not comply with the Digital Markets Act (DMA). According to the Commission’s press release on Monday, Meta’s binary choice forces users to either consent to the combination of their personal data or face the inability to access an equivalent version of its social networks that is less personalized.

Under the DMA’s ex-ante market contestability regulation, which has applied to Meta and other major “gatekeepers” since March 7, failing to comply could result in significant penalties. These penalties can amount to up to 10% of Meta’s global annual turnover, and potentially double to 20% for repeat violations.

The investigation stems from concerns raised by privacy advocacy and consumer protection groups, who argued that Meta’s approach does not align with EU data protection or consumer protection standards. They also contested that offering a subscription to avoid ads does not adequately address these regulatory requirements.

If Meta is found in breach of the DMA regulations following the investigation, it could face substantial fines and be compelled to revise its business model to align with European standards on user consent and data protection. This case marks a significant regulatory challenge for Meta in Europe’s evolving digital landscape.