EU Accuses Meta of Violating Digital Competition Rules

The European Union has formally accused Meta, the parent company of Facebook and Instagram, of breaching the bloc's new digital competition regulations.

The accusation stems from Meta's practice of compelling users to either view ads or pay a fee to avoid them.

Since November, Meta has offered European users the option to pay for ad-free versions of Facebook and Instagram.

This move aims to comply with the continent’s stringent data privacy laws. Users can pay approximately €10 ($10.50) per month on a laptop, while iOS or Android users are charged around €13 to avoid personalized ads based on their data.

The American tech giant introduced this subscription model following a ruling by the EU’s highest court, which mandated that Meta must obtain user consent before displaying targeted ads under the EU's rigorous data privacy regulations.

However, the European Commission, the EU's executive arm, indicated that preliminary findings of its investigation reveal Meta’s "pay or consent" ad model violates the Digital Markets Act (DMA) of the 27-nation bloc.

The Commission highlighted that Meta's model fails to allow users the right to freely consent to the use of their personal data for targeted online advertising.

The investigation began shortly after the DMA came into effect in March. EU Commissioner Thierry Breton, responsible for the bloc’s digital policy, emphasized that the DMA is designed to empower users to control how their data is used and to ensure that innovative companies can compete fairly with tech giants in data access.

Meta now has an opportunity to respond to the Commission, which must conclude its investigation by March 2025. The company could face fines amounting to 10% of its global annual revenue, potentially reaching billions of euros.

In a statement, Meta expressed that the subscription model for ad-free services follows the directives of Europe’s highest court and complies with the DMA. 

The company is looking forward to further constructive dialogue with the European Commission to resolve the investigation.