European Union antitrust regulators have accused Meta of violating the bloc's Digital Markets Act (DMA) with its "pay or consent" advertising model, a source of complaints since it was announced last year.

The European Commission said on Monday that Meta's policy, enacted in October in an attempt to comply with the DMA by giving Facebook and Instagram users the option to go ad-free for a fee, is a choice that doesn't address specific requirements of the Act. 

"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," EC commissioner for the internal market and perennial Meta nemesis Thierry Breton said of the matter. "Our preliminary view is that Meta's 'Pay or Consent' business model is in breach of the DMA."

Meta now charges €9.99 ($10.72) per month on the web and €12.99 ($13.94) per month on iOS and Android for those who want an ad-free service. This pay-or-get-display offer is only available to those in the EU, the European Economic Area, and Switzerland, as we understand it.

That pricing model specifically offers users the chance to opt out of personalized advertising served using data harvested and collated to build user profiles, which Meta previously pledged to stop doing in the EU without explicit user consent. The pay-or-consent model was adopted to comply with the DMA rule that requires express permission for such activity. Meta told us it believes it's still in the right.

"Subscription for no ads follows the direction of the highest court in Europe and complies with the DMA," a spokesperson told The Register. "We look forward to further constructive dialogue with the European Commission to bring this investigation to a close."

The EC doesn't see things that way, specifically complaining about two elements of Meta's pay-or-consent model. There's no option for a service tier that uses less personal data, and that there's no option for a user to explicitly consent - or not - to having disparate bits of personal data collated into a single profile. 

When pressed on what data Meta collects from paying customers in the EU, a spokesperson only told us that subscribing means personal data isn't used to serve ads - not that anything less is collected. 

"If someone has subscribed, we still need to process data to provide an inherently personalized service," the spokesperson told us, adding that personal data would still be needed and used for things like determining what reels show up in a user's feed. That's not sufficient to comply with the DMA, the EC said, because the binary choice presented by Meta doesn't include any option in which collection of personal data is lessened.

"To ensure compliance with the DMA, users who do not consent should still get access to an equivalent service which uses less of their personal data," the EC said. 

No, it's the regulators who are wrong

It's not like the European Commission just came out of left field with its opposition to Meta's subscription scheme - complaints about it have been pouring in since it was announced.

It took just a month for privacy advocates at None of Your Business (noyb) to challenge the matter, saying Meta's strategy infringed on EU laws by charging for what the bloc considers to be a fundamental right.

Consumer groups in the EU have also filed complaints, alleging the pay-or-consent model violated the continent's General Data Protection Regulation (GDPR) by offering a false choice that didn't include an option for less data collection. The EU Data Protection Board later agreed, saying that Meta didn't make it clear to users that their data was still being collected.

Meta appears undeterred by the pressure from multiple consumer and regulatory sides, and pointed us to a blog post written last week by Nick Clegg, the company's president of global affairs, which warns that EU regulations are stifling innovation on the continent. Yes, that same Nick Clegg who used to be the UK's deputy prime minister.

"The sad fact is the EU is no longer a fertile ground for innovation and world-class companies," Clegg wrote. "Our companies are growing more slowly, reporting lower returns and lagging behind their peers in research and development, even in industries that were traditionally Europe's strength."

Meta has also offered to cut its subscription fees in half, but hasn't heard back from regulators, a spokesperson told us.

The EC said the investigation is expected to conclude within 12 months of its March 2024 kickoff alongside investigations of Apple and Alphabet for similarly being at odds with DMA rules.

The commission last week accused Apple of violating the DMA with its App Store anti-steering rules, while investigations of Alphabet appear to be ongoing.

The European Commission declined to answer our questions, directing us to contact Meta for answers about its business model. ®

https://www.theregister.com//2024/07/01/meta_eu_dma_violation/