EU Commission shoots against Facebook's payment model
For 9.99 Euro per month, people can use Instagram and Facebook without ads. Those who don't want this, continue to pay with their data. The EU Commission sees this as a breach of European competition law. This could be costly for Meta.
The EU Commission accuses the US tech conglomerate Meta of violating European competition law with its payment model on the platforms Facebook and Instagram. The Commission made this known in a preliminary statement. Brussels assumes that Meta forces users and users to release personal data. The company collects large amounts of data and thus gains a competitive advantage.
Meta introduced a pay-to-use option for Facebook and Instagram in November: Users can pay a monthly fee of at least 9.99 Euro and then see no ads. Users who accept personalized ads can continue to use the networks for free. Critics accuse the company of disabling EU data protection regulations and effectively forcing users to hand over their data. The European Data Protection Board (EDPB) has already deemed the model unlawful from a consumer protection perspective in April.
The Commission commented on this assessment. The pay-as-you-go 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. People on Facebook and Instagram cannot freely decide whether Meta can use their data for personalized advertising.
Regarding the large reach of the two platforms, Meta can impose any business terms on users and amass large amounts of data, explained the Commission further. This has given the company "potential advantages over competitors who do not have access to such a large amount of data." In addition to concerns about consumer protection, Brussels assumes that Meta is violating EU competition law.
This statement is another step in the proceedings against Meta under the Digital Markets Act. With this law, 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. Meta faces fines of up to ten percent of its global annual turnover. Measured by the previous year, this corresponds to a maximum fine of around 12.5 billion Euro.
- The EU Commission argues that Meta's pay-to-use model on Facebook and Instagram, which offers ad-free access in exchange for user data, potentially violates European antitrust law due to its data protection implications.
- Critics also suggest that Meta is circumventing EU data protection regulations by offering this option, effectively forcing users to hand over their data for continued use of the platforms.
- The EU Commission's concern extends beyond consumer protection, as they also believe that Meta's large data holdings from Facebook and Instagram give it an unfair advantage in the digital economy and potentially violates EU competition law.
- With the Digital Markets Act, the EU aims to rebalance the digital economy and limit the market power of large digital companies like Meta, which could potentially face fines of up to ten percent of its global annual turnover under this law.
