EU Commission: payment model on Facebook and Instagram breaks competition rules
Meta introduced a paid subscription option for Facebook and Instagram in November: Users can pay a monthly fee of at least 9.99 Euro if they want to see no advertisements on Facebook and Instagram. Only those who accept targeted ads can continue to use the networks for free. The EU Data Protection Board (EDPB) had already considered this model inconsistent with consumer protection in April.
The Commission now agrees with this assessment. The subscription model "forces users to consent to the processing of their personal data and deprives them of a less personalized, but equally valuable version of Meta's social networks," the competition authorities explained. Users of the Facebook and Instagram platforms could not freely decide whether Meta could use their data for targeted advertising.
Due to the large reach of the two platforms, Meta has been able to impose arbitrary terms of use on users and amass large amounts of data, giving the company "potential advantages over competitors who do not have access to such a large amount of data," the Commission added. In addition to concerns about consumer protection, Brussels believes Meta is violating EU competition law.
The statement on Monday is another step in the proceedings against Meta under the Digital Markets Act (DMA), with which the EU aims to limit the market power of large digital companies. The Commission must complete its investigations by the end of March next year. In the event of a violation, Meta faces penalties of up to ten percent of its global annual revenue - measured by the previous year, this would amount to a maximum fine of around 12.5 billion Euros.
- The EU Commission shares the EU Data Protection Board's assessment that Meta's paid subscription model, introduced for Facebook and Instagram in November, is inconsistent with consumer protection due to its impact on user data consent and personalized advertising.
- Brussels also believes that Meta, with its large platforms reaching millions of users, is potentially violating EU competition law by imposing arbitrary terms of use and amassing vast amounts of user data, giving it an unfair advantage over competitors.
- The competition authorities explained that the subscription model forces users to consent to the processing of their personal data for targeted advertising and limits their access to a less personalized, but equally valuable version of Meta's social networks.
- As part of the proceedings against Meta under the Digital Markets Act (DMA), the EU Commission must complete its investigations by the end of March next year, and if found guilty, Meta could face penalties equal to ten percent of its global annual revenue, reaching an estimated maximum fine of 12.5 billion Euros.
- This statement from the EU Commission represents another step in regulating the market power of large digital companies, like Meta, ensuring fair competition and consumer protection within the EU.
