EU Accuses Meta Of Violating Digital Competition Rules, Threatens $13.5n Fine

The European Union has accused Facebook’s parent company, Meta of breaching Europe’s new digital competition rules over its “pay or consent” advertising model.

The European Commission said in a statement on Monday that, in its preliminary view, “this binary choice forces users to consent to the use of their personal data and fails to provide them a less personalised but equivalent version of Meta’s social networks.”

Meta launched a service last year called “Subscription for no ads,” allowing European users of Facebook and Instagram to pay up to €12.99 ($14) a month for ad-free versions.

The alternative is to accept versions with personalised ads.

If the provisional findings of the Commission’s investigation are confirmed, EU could slam Meta with a fine equivalent to 10% of its global annual revenue under its landmark Digital Markets Act.

Based on the company’s 2023 reports, that would amount to $13.5 billion.

A European Commission’s official in charge of competition policy, Margrethe Vestager noted in Monday’s statement that Meta had been accumulating personal data of “millions of EU citizens over many years.”

“We want to empower citizens to be able to take control over their own data and choose a less personalised ads experience,” she said.

Meta on its part has said it didn’t accept the Commission’s findings.

“Subscription for no ads’ follows the direction of the highest court in Europe and complies with the DMA,” a spokesperson told CNN.

“We look forward to further constructive dialogue with the European Commission to bring this investigation to a close,” Meta said.

LEADERSHIP reported that the European Commission had similarly accused Apple last month of breaching the DMA by preventing app developers from freely directing consumers to cheaper services.

The regulators are also investigating Google parent organisation, Alphabet under the new law.

The DMA, which came into force in March, requires dominant online platforms, also called gatekeepers to give users more choice, and rivals more opportunities to compete.

Online platforms often collect personal data across their own and third-party services and use it in digital advertising services.

A senior official at the Commission, Michael Koenig said Meta must offer users an alternative to “full” ad personalisations that “does not rely on this personal data and which is then automatically less personalised and still available to them.”

“Then Meta is free to keep a third option, which is a subscription not to see ads at all, or a fourth option which may have some premium features,” he told journalists.

The Commission will conclude its investigation on Meta by late March next year.