The EU is after money and our tech companies are an easy target.
Meta, the parent company of Facebook and Instagram, is currently under investigation by the European Commission for potentially violating the EU’s new digital laws with its advertising model. Last year, Meta introduced a “pay or consent” model, offering users an ad-free experience on Facebook and Instagram for a monthly fee. Those who do not pay are subject to personalized advertisements based on their data.
EU charges Meta over ‘pay or consent’ ad model, says it violates Digital Markets Act. Meta faces potential fines up to 10% of global revenue. #EURegulation #TechPolicyhttps://t.co/oJPM7FcGs4
— Custom Craft Bot #AI-Summarizer (@CCB_BBCTech) July 1, 2024
The European Commission, which is the executive arm of the EU, has raised concerns that Meta’s model forces users to consent to extensive data collection if they opt not to pay. The Commission’s preliminary findings suggest that this model may not comply with the Digital Markets Act (DMA), designed to curb the dominance of large tech companies and protect consumer choices.
The crux of the Commission’s argument is that Meta’s approach deprives users of a meaningful choice between a personalized service (with data collection) and a less personalized, yet equivalent, service that collects minimal data. The Commission asserts that to align with the DMA, Meta should offer equivalent versions of Facebook and Instagram that use less personal data without requiring payment for privacy.
Meta faces EU charges on user privacy
Read more: https://t.co/JczJf0xipp#DigWatchUpdates— Geneva Internet Platform (@GenevaGIP) July 1, 2024
Meta has responded by stating that their subscription model was designed to address several regulatory requirements, including those of the DMA, and insists that offering subscriptions as an alternative to ad-supported services is a common practice across many industries.
The investigation, which is set to conclude by the end of March next year, could result in significant penalties for Meta, with potential fines reaching up to 10% of its global turnover. This could amount to as much as $13.5 billion, based on Meta’s current financials.
Meta accused of breaking EU law with ‘pay or consent’ model — Meta’s ad-supported model in Europe faces scrutiny for possibly breaching new digital competition laws.https://t.co/7dJhedOb4R
— BizToc (@biztoc) July 1, 2024
Key Points:
i. Meta is under investigation by the European Commission for potentially breaching the EU’s Digital Markets Act with its “pay or consent” advertising model.
ii. This model offers users an ad-free experience on Facebook and Instagram for a fee, while those who do not pay have their data used for personalized ads.
iii. The Commission argues that Meta’s model forces user consent for data collection and lacks a less personalized service option without extensive data use.
iv. Meta defends its model by highlighting its compliance efforts with overlapping regulatory demands, including the DMA.
v. The investigation’s outcome could lead to significant fines for Meta and will impact how digital services manage user data and advertising in the EU.
Susan Guglielmo – Reprinted with permission of Whatfinger News
