Facebook and Instagram ‘broke law’ over ad-free subscriptions, says EU

• Meta platforms have been accused of breaching the EU’s Digital Markets Act regulations.
• EU’s Digitial Markets Act was introduced in 2022.
• Facebook and Instagram owner could face a fine of 10% of its global revenue if it is found to have broken the DMA rules.

Facebook and Instagram’s “pay or consent” advertising model breaches EU laws, the European Commission has said. Users of the social media platforms in Europe have been presented with the option to either consent to personalised ads or pay €12.99 (£11) a month to have them removed. 

Meta, the owner of Facebook and Instagram, has been told by the Commission that it has taken the “preliminary view” that the subscription model fails to comply with the Digital Markets Act (DMA). But BBC reports that the company contends that it is fully compliant with EU rules. 

A spokesperson for Meta said “Subscription for no ads follows the direction of the highest court in Europe and complies with the DMA.” It could face a fine of up to 10% of its global revenue if the EU rules that it failed to comply with the DMA laws. 

In its initial findings, the Commission said that it found the binary choice of “pay or consent” forces users to “consent to the combination of their personal data and fails to provide them a less personalised but equivalent version of Meta's social networks”. 

Meta logo on a smartphone. Photo by SEBASTIEN BOZON/AFP via Getty Images | SEBASTIEN BOZON/AFP via Getty Images

Thierry Breton, Commissioner for Internal Market, said: “Today we make another important step to ensure full compliance with the DMA by Meta. Our preliminary view is that Meta’s “Pay or Consent” business model is in breach of 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.” 

Margrethe Vestager, Executive Vice-President in charge of competition policy, added: “Our investigation aims to ensure contestability in markets where gatekeepers like Meta have been accumulating personal data of millions of EU citizens over many years. Our preliminary view is that Meta’s advertising model fails to comply with the Digital Markets Act. And we want to empower citizens to be able to take control over their own data and choose a less personalised ads experience.”

DMA was introduced in November 2022 and became applicable, for the most part, on 2 May last year. Meta is not the only tech giant to be accused of breaching the regulations with Apple facing similar accusations over its App Store last month. 

The EU Commission aims to conclude its investigation within 12 months. Meta now has the possibility to exercise its rights of defence by examining the documents in the Commission's investigation file and replying in writing to the Commission's preliminary findings. 

If you are wanting to learn more about the EU’s DMA regulations and what the rules actually mean, Checkout.com have a super in-depth explainer that’s well worth a read. It includes details about the purpose of the laws, who the gatekeepers are and plenty more.