Meta Faces Potential $13.4 Billion Fine From the EU
Meta today became the second company charged with violating Europe’s Digital Markets Act, one week after the EU threatened Apple with a $38 billion fine. While Apple’s charge focuses on its treatment of outside payment methods and third-party apps, Meta’s is all about its big money maker: ads on Facebook and Instagram.
Throughout most of the world, Meta monetizes its sites using targeted ads, which means it harvests your data to focus your ads on your interests. To attempt to appease the DMA’s privacy regulations, the company lets European users subscribe to an ad-free plan for €9.99 per month (more if you add linked accounts or subscribe using an app store), but the region is now saying this isn’t enough.
In a preliminary ruling posted to its site today, the European Commission said Meta must also allow users to access a third option, which should be a free plan that would still show ads but use less personal data.
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“Meta has forced millions of users across EU into a binary choice: ‘pay or consent’,” EU Commissioner for Internal Market Thierry Breton posted on X, formerly Twitter. “In our preliminary conclusion this is a breach of the DMA.”
Like Apple, Meta now has the opportunity to to write a defense. The European Commission says it will then “conclude its investigation within 12 months from the opening of proceedings on 25 March 2024.”
If found guilty, Meta could be fined up to 10% of its total global revenue, or around $13.4 billion based on its 2023 numbers.
Meta did not immediately reply to Lifehacker’s request for comment. Spokesperson Matther Pollard did, however, tell The Verge in an email that, “Subscription for no ads follows the direction of the highest court in Europes and complies with the DMA...We look forward to further constructive dialogue with the European Commission to bring this investigation to a close.”
Meta's infraction under the Digital Markets Act revolves around its advertising practices on platforms like Facebook and Instagram, similar to the EU's concern with Apple's treatment of external payment methods and apps. The preliminary ruling issued by the European Commission suggests that Meta's ad-free subscription plan, while available for European users, fails to meet the DMA's privacy regulations, potentially leading to a Meta EU fine that could reach up to 10% of its 2023 global revenue, amounting to approximately $13.4 billion.
