For the past eight months, Europeans who didn’t like the way Meta tracked their data for personalized ads had another option: They could pay the tech giant up to 12.99 euros ($14) a month to protect their privacy.
Meta, which launched in November 2023, introduced its “pay or agree” subscription model as fines, lawsuits and regulatory attention pressured the company to change the way it asks users to consent to targeted ads. But on Monday, the European Commission rejected its latest solution, arguing that its “pay or agree” subscription is illegal under the EU’s fresh Digital Markets Act (DMA).
“Our preliminary view is that Meta’s ‘Pay or Agree’ business model violates the DMA,” said Thierry Breton, EU Internal Market Commissioner statement. “DMA aims to give users back the power to decide how their data is used and ensure that innovative companies can compete on a level playing field with tech giants when it comes to data access.”
Meta denied that its subscription model violates the rules. “The ad-free subscription is in line with the guidance of the highest court in Europe and is compliant with the DMA,” Meta spokesman Matt Pollard told WIRED, referring to a July ruling by the Court of Justice of the European Union (CJEU) that found Meta must offer users an alternative to advertising, if necessary, for an appropriate fee. “We look forward to further constructive dialogue with the European Commission to conclude this investigation.”
During a news conference Monday morning, commission officials said their concern was not that the company was charging for the ad-free service. “It’s perfectly fine with us as long as we have the middle option,” they said, explaining that there should be a third option that can still include ads, but is just less targeted. There are various, less specific ways to deliver ads to users, they added, such as contextual advertising. “Consumers must be able to choose an alternative version of the service that is based on the lack of personalization of advertising.”
Under the DMA, very immense tech platforms must ask users for consent if they want to share their personal data with other parts of their businesses. In Meta’s case, the Commission said it was particularly concerned about the competitive advantage Meta gains over its rivals by being able to combine data from platforms like Instagram and its advertising business.
Meta has a chance to respond to the charges brought Monday. However, if the company fails to reach an agreement with regulators by March 2025, Brussels has the power to impose fines of up to 10 percent of the company’s global turnover.