European Commission issues preliminary finding that Meta’s ‘pay-or-agree’ model violates DMA



Meta offers a paid plan to remove ads on Facebook and Instagram, but consumer groups have complained

that it is unfair to users, forcing them to either pay for ads or give up their personal information . The European Commission, the EU's executive body, has announced that it has conducted a preliminary investigation into Meta's 'Consent or Pay' model and has notified Meta that it violates the EU's Digital Markets Act (DMA).

The Commission sends preliminary findings to Meta over its “Pay or Consent” model for breach of the Digital Markets Act
https://ec.europa.eu/commission/presscorner/detail/en/ip_24_3582



Meta's pay or consent model in crosshairs for breaching EU tech rules | Reuters

https://www.reuters.com/technology/meta-charged-with-failing-comply-with-eu-tech-rules-2024-07-01/

Meta has been offering paid plans in Europe since November 2023 to remove ads from Facebook and Instagram, but consumer groups have complained that the plans are unreasonably expensive and unfair, forcing users to either 'accept the use of their personal information for targeting or pay.'

In April 2024, the European Data Protection Board called for a third option, stating that 'if a consent or pay model is adopted, it should not be the norm to only offer paid alternatives.'

EU advises Meta to stop 'pay for ads', mandates free 'third option' that doesn't use personal information - GIGAZINE



This time, the European Commission has taken the view that Meta's 'Consent or Pay model' does not meet the necessary requirements set out in Article 5(2) of the DMA and is therefore not compliant with the DMA.

In particular, with regard to the two points -- 'not allowing users to choose services that use less personal information and are otherwise equivalent to services based on personalized advertising' and 'not allowing users to exercise their 'right to freely consent to the combination of their personal data'' -- the report points out that, in order to comply with the DMA, users who do not agree to Consent or Pay will need to be able to use equivalent services that use less personal information.

Upon being informed of the results of the European Commission's preliminary investigation, Meta may exercise its rights of defence by submitting a written response.



The Commission is expected to conclude its investigation within 12 months, and if its preliminary opinion is finally confirmed, it will find that Meta's Consent or Pay model is in violation of Article 5(2) of the DMA and Meta could be subject to fines of up to 10% of its global turnover, and in case of repeated infringements, the fines could reach up to 20% of its global turnover.

Margrethe Vestager, the European Commission's Executive Vice-President for Competition Policy, said: 'Our investigation is aimed at ensuring competitiveness in a market where gatekeepers like Meta have accumulated personal data of millions of EU citizens over many years. Our preliminary view is that Meta's advertising model is not compliant with the DMA. We want citizens to have control over their data and be able to choose non-personalized advertising experiences.'

Thierry Breton, Commissioner for the Internal Market, also said: 'Today we take an important step towards ensuring that Meta is fully compliant with the DMA. Our preliminary view is that Meta's Consent or Pay model violates the DMA. The DMA exists to give users back the power to decide how their data is used, and to enable innovative companies to compete on an equal footing with Big Tech when it comes to access to data.'

Continued
EU tells Meta that Facebook and Instagram's 'pay or accept' model could violate consumer protection law - GIGAZINE




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