Meta’s ‘Pay or Consent’ Terms Breach EU’s DMA

Meta has joined Apple, becoming the second major tech company to be found in breach of the EU's Digital Markets Act (DMA)....
Meta’s ‘Pay or Consent’ Terms Breach EU’s DMA
Written by Matt Milano
  • Meta has joined Apple, becoming the second major tech company to be found in breach of the EU’s Digital Markets Act (DMA).

    According to the EU Commission, Meta’s “pay or consent” advertising model is in breach of the DMA. In an effort to comply wit the DMA, Meta introduced a paid option that allow users have an ad-free experience when using the company’s platforms if they pay a monthly fee. Alternatively, users who don’t want to pay must consent to their data being used for personalized ads.

    The EU says that Meta’s binary choice doesn’t cut it and that the company is required to give users a third option.

    Under Article 5(2) of the DMA, gatekeepers must seek users’ consent for combining their personal data between designated core platform services and other services, and if a user refuses such consent, they should have access to a less personalised but equivalent alternative. Gatekeepers cannot make use of the service or certain functionalities conditional on users’ consent.

    The Commission says Meta violates the DMA in two specific ways:

    Does not allow users to opt for a service that uses less of their personal data but is otherwise equivalent to the “personalised ads” based service.

    Does not allow users to exercise their right to freely consent to the combination of their personal data.

    To rectify the situation, the Commission says Meta must give users the ability to use the platform for free, without their data being used to personalize ads. Meta can still serve ads, they simply will not be personalized and will be far more random. Alternately, users who want an ad-free experience could still opt to pay for it.

    As with the EU’s recent finding against Apple, Meta will now have the possibility to defend its practices before a final ruling is issued. If the final ruling is decided against Meta, the company could face fines up to 10% of its worldwide revenue, or up to 20% if it is found to be a repeated offender.

    “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,” said Margrethe Vestager, Executive Vice-President in charge of competition policy. “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.”

    “Today we make another important step to ensure full compliance with the DMA by Meta,” Thierry Breton, Commissioner for Internal Market. “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.”

    Get the WebProNews newsletter delivered to your inbox

    Get the free daily newsletter read by decision makers

    Advertise with Us

    Ready to get started?

    Get our media kit