Meta's 'Pay Or Consent' Advertising Model Fails To Comply With DMA; EU Informs

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New Delhi: The European Union on Monday informed Meta (formerly Facebook) of its preliminary findings that its "pay or consent" advertising model fails to comply with the Digital Markets Act (DMA).

In the European Commission's preliminary view, "this binary choice forces users to consent to the combination of their personal data and fails to provide them with a less personalised but equivalent version of Meta's social networks".

DMA was introduced by the EU's commission 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.

In response to regulatory changes in the EU, Meta introduced in November 2023 a binary 'pay or consent' offer whereby EU users of Facebook and Instagram have to choose between - 'the subscription for a monthly fee to an ads-free version of these social networks' or 'the free-of-charge access to a version of these social networks with personalised ads'.

"The commission takes the preliminary view that Meta's 'pay or consent' advertising model is not compliant with the DMA as it does not meet the necessary requirements set out under Article 5(2)," the commission said in a statement.

Under Article 5(2) of the DMA, gatekeepers must seek users' consent for combining their 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.

"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," said Margrethe Vestager, Executive VP in charge of competition policy.

In case of non-compliance, the commission mentioned that it can impose fines of up to 10 per cent of the gatekeeper's total worldwide turnover. Such fines can go up to 20 per cent in case of repeated infringement.