Facebook and Instagram’s ‘Pay or Consent’ Advertising Model Under EU Scrutiny

Naman Ramachandran
·2-min read

The European Commission has raised concerns over Meta’s “pay or consent” advertising model for Facebook and Instagram users in the EU. In preliminary findings released on Monday, regulators suggest the social media giant’s approach may not comply with the Digital Markets Act (DMA).

Meta introduced the model in November 2023, offering EU users two options: pay a monthly fee for an ad-free experience or continue using the platforms for free with personalized ads. However, the Commission argues this binary choice fails to provide users with a less personalized but equivalent alternative, as required by the DMA.

More from Variety

In response to the scrutiny, Meta points to its significant compliance efforts. The company reports that over 11,000 employees have been involved in designing and implementing new systems and user controls to meet DMA requirements. Additionally, Meta claims to have invested more than 590,000 hours of engineering and technical work – equivalent to over six decades work – to introduce the necessary changes.

Nick Clegg, Meta’s president of Global Affairs, recently penned an op-ed warning about the potential costs to European innovation resulting from stringent regulation. Meanwhile, Meta said it has offered to reduce the cost of its subscriptions service but is awaiting regulatory feedback.

The Commission will conclude its investigation by March 25, 2025. If concerns are confirmed, Meta Meta could face fines of up to 10% of its total worldwide turnover, with penalties potentially doubling for repeated infractions. The case underscores the ongoing tension between tech giants and EU regulators over data privacy, market competition and innovation in the digital space.

“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,” said Margrethe Vestager, European Commission executive VP in charge of competition policy.

Thierry Breton, Commissioner for Internal Market, added: “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.”

A Meta company spokesperson told Variety: “Subscription for no ads follows the direction of the highest court in Europe and complies with the DMA. We look forward to further constructive dialogue with the European Commission to bring this investigation to a close.”

Best of Variety

Sign up for Variety’s Newsletter. For the latest news, follow us on Facebook, Twitter, and Instagram.

  • Up next
  • Up next
  • Up next
  • Up next

Latest stories

  • French Directors Benoit Jacquot, Jacques Doillon Questioned by Police Over Rape, Sexual Assault Accusations by Judith Godreche

    French directors Benoit Jacquot (“Farewell, My Queen”) and Jacques Doillon (“The Little Gangster”) were summoned by police on July 1 for questioning in connection with complaints filed by actor Judith Godreche on Feb. 8. The two directors were taken in custody by the Juvenile Protection Brigade, according to the AFP. Godrèche lodged a rape complaint …

  • 26 Extremelyyyyyy Useful Industry Hacks That Companies Don't Want Customers To Know

    "I've flown round trip to Chicago for $30, Houston for $45, Miami for $50, etc."

  • Chinese firms eye Morocco as way to cash in on US electric vehicle subsidies

    After the United States passed new subsidies designed to boost domestic electric vehicle production and cut into Beijing’s supply chain dominance, Chinese manufacturers began investing in an unlikely place: Morocco. In the rolling hills near Tangiers and in industrial parks near the Atlantic Ocean, they have announced plans for new factories to make parts for EVs that may qualify for $7,500 credits to car buyers in the United States. Similar investments have been announced in other countries that share free trade agreements with the United States, including South Korea and Mexico.

  • 3 penny stocks I’d buy to target a £1,280 passive income

    These high-dividend penny shares could be great passive income buys for years to come. Here Royston Wild gives the lowdown on their prospects. The post 3 penny stocks I’d buy to target a £1,280 passive income appeared first on The Motley Fool UK.

  • Man's business worth millions after teaming up with former Apprentice winner

    A former DJ from near High Wycombe has become a multi-millionaire after teaming up with a former Apprentice winner.

  • U.S. Administrative Procedure Law Exists for a Reason. The SEC Must Follow It

    The regulator’s refusal to listen to dissenting opinion on its new Dealer Rule left us no option but to sue for clarity and accountability, says Marisa Coppel, head of legal at the Blockchain Association.

  • North Sea oil decline: ‘We can’t have a repeat of what happened to 80s miners’

    Unlikely alliance of unions and climate groups call for ‘clear and funded’ transition plan for communities reliant on dwindling industry

  • U.S. Judge Sets Stage for NFT Securities Trial as DraftKings Lawsuit Moves Forward

    The class action suit from DraftKings buyers alleges that NFTs are investment contracts.

  • UK water companies at risk of claims after Supreme Court sewage ruling

    British water companies are at increased risk of lawsuits over pollution after a landmark ruling from the United Kingdom's Supreme Court on Tuesday, amid public outrage over discharges of raw sewage in Britain. The Manchester Ship Canal, which owns the Victorian-era canal in northern England, won an appeal that means it can sue United Utilities over discharges of water contaminated with untreated sewage.

  • I'm 62. Can I Retire With $500k in a Roth IRA and $2,000 per Month Between Social Security and Pension?

    Ultimately, whether you have enough to retire depends on your costs and your income. If you can live on a tight budget with the right circumstances, $2,000 a month from a pension and Social Security, combined with the right strategy with $500,000 in your Roth IRA may be enough to sustain you throughout your retirement. […] The post I Have $500k in a Roth IRA, and Will Receive a Combined $2,000 a Month From a Pension and Social Security. Can I Retire at 62? appeared first on SmartReads by SmartAs

  • Lawsuit: Northwestern’s law school is biased against White men in hiring

    A lawsuit filed Tuesday against Northwestern University opened a new front in the battle against affirmative action, alleging that its law school hires less-qualified people of color and women over White men for faculty positions in violation of federal anti-discrimination laws. The complaint, brought by a group called Faculty, Alumni and Students Opposed to Racial Preferences, targets Northwestern’s law school. But the allegations amount to a sweeping criticism of American universities, allegin

  • Persimmon Homes manager earns top industry award two years in a row

    A site manager has been honoured with a significant national industry award.

  • Polestar posts loss, plans steps to offset tariffs on China-made EVs

    STOCKHOLM (Reuters) -Electric vehicle (EV) maker Polestar said it will have to take steps to offset hefty EU and U.S. import tariffs on its Chinese-made electric cars as it posted a first-quarter operating loss on Tuesday. The Swedish company, controlled by China's Geely, makes all its EVs in China, but its new model, the Polestar 3, will be made in the United States from the end of this summer and its Polestar 4 in South Korea from the second half of next year. Until then, it will incur provisional tariffs of 20% for the cars it brings into the European Union under a proposal by the European Commission and more than 100% for the United States.

  • What a Labour government will mean for your pension

    The pensioner vote has been a key battleground in this election. One of the Conservatives’ key pledges was the introduction of the “triple lock plus” – extra tax breaks for the retired. But it is highly unlikely the policy will see the light of day, so what does Labour have in store for your retirement savings – and what can you do about it?

  • Top bankers ordered to rein in travel and entertainment expenses

    HSBC has warned its top bankers to rein in spending on entertainment and travel as it races to slash costs.

  • German industry turns to solar in race to cut energy costs

    For months, Philip Matthias tried to convince his father to install solar panels on their company's roof in the eastern German state of Thuringia, aiming to cut electricity costs and carbon emissions at the metal products factory. Since the war in Ukraine and the sudden drop in Russia fossil fuel exports to Germany, Berlin has introduced laws to accelerate solar power expansion, part of its plan to cover 80% of the country's energy from renewables by 2030. Encouraged by a feed-in tariff providing a guaranteed price to renewable energy producers selling their power, as well as reduced solar panel costs, German companies are increasingly turning to solar to get around high energy costs.

  • What to know about the plea deal offered Boeing in connection with 2 plane crashes

    Federal prosecutors and victims' families are waiting for Boeing to decide whether to accept a plea deal that would settle a criminal fraud charge accusing the aerospace giant of misleading regulators who approved the 737 Max jetliner before two of the planes crashed. Relatives of some of the 346 people who died in the October 2018 and March 2019 crashes are furious about the plea offer, which Justice Department prosecutors spelled out in an online meeting with the families and their lawyers on Sunday. The families want to put Boeing on trial.

  • Honig says this is why Trump’s trial won’t happen before the election

    CNN senior legal analyst Elie Honig explains why the Supreme Court ruling that Donald Trump may claim immunity from criminal prosecution for some of the actions he took in the waning days of his presidency in a decision will likely further delay a trial on the federal election subversion charges pending against him.

  • ‘We’re in limbo’: Boeing takeover leaves longtime Belfast factory under threat

    Workers and politicians fear steep job cuts at Northern Ireland’s Spirit AeroSystems, which has about 3,500 workers

  • Top 3 UK Stocks Estimated To Be Undervalued In July 2024

    Amidst the backdrop of heightened volatility and upcoming elections, the United Kingdom's financial markets, particularly the FTSE 100, are displaying cautious movements. In such a climate, identifying stocks that appear undervalued could present opportunities for investors seeking potential in a fluctuating market environment.