Meta continues to hit walls with its heavily scrutinized plan to comply with the European Union’s strict online competition law, the Digital Markets Act (DMA), by offering Facebook and Instagram subscriptions as an alternative for privacy-inclined users who want to opt out of ad targeting.
Today, the European Commission (EC) announced preliminary findings that Meta’s so-called “pay or consent” or “pay or OK” model—which gives users a choice to either pay for access to its platforms or give consent to collect user data to target ads—is not compliant with the DMA.
According to the EC, Meta’s advertising model violates the DMA in two ways. First, it “does not allow users to opt for a service that uses less of their personal data but is otherwise equivalent to the ‘personalized ads-based service.” And second, it “does not allow users to exercise their right to freely consent to the combination of their personal data,” the press release said.
Now, Meta will have a chance to review the EC’s evidence and defend its policy, with today’s findings kicking off a process that will take months. The EC’s investigation is expected to conclude next March. Thierry Breton, the commissioner for the internal market, said in the press release that the preliminary findings represent “another important step” to ensure Meta’s full compliance with the DMA.
“The DMA is there to give back to the users the power to decide how their data is used and ensure innovative companies can compete on equal footing with tech giants on data access,” Breton said.
A Meta spokesperson told Ars that Meta plans to fight the findings—which could trigger fines up to 10 percent of the company’s worldwide turnover, as well as fines up to 20 percent for repeat infringement if Meta loses.
Meta continues to claim that its “subscription for no ads” model was “endorsed” by the highest court in Europe, the Court of Justice of the European Union (CJEU), last year.
“Subscription for no ads follows the direction of the highest court in Europe and complies with the DMA,” Meta’s spokesperson said. “We look forward to further constructive dialogue with the European Commission to bring this investigation to a close.”
However, some critics have noted that the supposed endorsement was not an official part of the ruling and that particular case was not regarding DMA compliance.
The EC agreed that more talks were needed, writing in the press release, “the Commission continues its constructive engagement with Meta to identify a satisfactory path towards effective compliance.”