Meta’s CEO Mark Zuckerberg received bad news from the European Commission on Monday. The commission stated that Meta’s “pay or consent” advertising model violates the EU’s Digital Markets Act. This is not good news for Meta in the European Union, as it could result in significant fines for the company if found to be non-compliant.
In 2023, Meta introduced the “pay or consent” model in the EU following a ruling from European regulators in 2022. This ruling required Meta to allow users to opt-out of personalized ads based on their social platform activity. The model forces users to pay a monthly fee to avoid ads on Facebook and Instagram or consent to receive personalized ads to continue using the free version.
However, the European Commission expressed concerns with Meta’s model, stating that the binary choice offered to users fails to provide a less personalized but equivalent version of Meta’s social networks. Meta now has the opportunity to respond in writing to these preliminary findings. The investigation is expected to conclude within 12 months, potentially resulting in fines of up to 10% of Meta’s global revenue.
Last year, Meta faced regulatory scrutiny in the EU when it was fined $1.3 billion for transferring Facebook users’ data to the US. It appears that tech giants like Meta and Apple are under increasing regulatory pressure in the EU regarding their business practices, as Apple was recently informed of similar findings related to its App Store rules.
