Meta CEO Mark Zuckerberg received troubling news from the EU on Monday. 
It’s been a rough start to the week for Meta in Europe. The European Commission has declared that Meta’s ‘pay or consent’ advertising model breaches the Digital Markets Act. This new finding adds to Meta’s mounting regulatory issues in the region.
Breach of Digital Markets Act
Meta introduced the ‘pay or consent’ model in 2023 after being compelled by European regulators in 2022 to allow users to opt out of personalized ads. The model proposes that users pay a monthly fee to avoid seeing ads on Facebook and Instagram or continue using a free version with personalized ads.
The European Commission stated, In the Commission’s preliminary view, this binary choice forces users to consent to the combination of their personal data and fails to provide them a less personalized but equivalent version of Meta’s social networks.
This means that Meta could face penalties if it does not adjust its practices.
Possible Financial Repercussions
If Meta is found non-compliant after the investigation is concluded within twelve months, it could face fines amounting to 10% of its global revenue. An unnamed spokesperson from Meta noted, Subscription for no ads follows the direction of the highest court in Europe and complies with the DMA. We look forward to further constructive dialogue with the European Commission to bring this investigation to a close.
Previous Data Transfer Fine
This isn’t the first time Meta has clashed with EU regulators. Last year, Meta was slapped with a $1.3 billion fine for transferring Facebook user data to the U.S., marking the largest penalty since the EU’s strict data privacy regime began five years ago. The violation involved various forms of user data, including names, email addresses, IP addresses, messages, viewing history, geolocation data, and other personal information used for targeted online advertisements.
Sustained Scrutiny on Tech Giants
Meta is not alone in this scrutiny. Recently, Apple was also accused by the European Commission of violating similar rules under the Digital Markets Act regarding their App Store regulations. The statement indicated that Apple’s rules prevent app developers from freely steering consumers towards alternative channels for offers and content.
Corporate Response and Ongoing Developments
Nick Clegg, Meta’s president of global affairs, and chief legal officer Jennifer Newstead previously commented on such stringent actions stating, This decision is flawed, unjustified and sets a dangerous precedent for the countless other companies transferring data between the EU and U.S.
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