Meta Accused of Breaking Competition Laws over Its New Pay or Consent Model

• Meta is under fire once again for allegedly violating the DMA over its pay or consent model launched last year.
• This model gives users two options - either to provide consent or pay to prevent their data from being used in creating advertisements.
• The EU says this model seeks forced consent" and doesn't give users any real choice. But Meta on the other hand argues that this model does not go against the DMA.

Meta has gotten in trouble with the EU again, and this time for violating its competition rules with its latest pay or consent" model that forces users to pay to not have their data tracked.

The model was launched late last year, apparently to comply with the EU's data privacy rules.

The purpose of the fee (12.99 or $14 a month) is simple - you pay not to have your personal data used for advertising purposes.

And if you choose not to pay, you'll have no option but to let the company use your data to create personalized ads for you on ALL Meta platforms.

This doesn't sound like free will - if anything it seems like forced consent. That's exactly what the EU has said in its statement as well.

This binary choice forces users to consent to the (use) of their personal data and fails to provide them a less personalized but equivalent version of Meta's social networks.' - The DMA

In simple terms, the EU feels that customers who don't want to pay should also get access to a similar service that at least uses less" of their personal data for advertising purposes.

The findings by the EU are provisional at the moment and it is yet to pass a judgment.

However, if it finds that Meta truly violated its competition rules, it will be subjected to a fine of up to 10% of its global annual turnover. Based on reports from 2023, that would be roughly around $13.5bn or 10.5bn.

Meta's Response

Meta has rejected all claims made by the EU and said that its pay or consent model not only complies with the DMA but also with the direction of the highest court in Europe.

So for now, it has decided to collaborate with the agency and find a mutually-beneficial solution to this.

The investigation is expected to conclude by March next year. But with Meta's intervention, we might expect a speedy closure.

Meta isn't the only one under fire. Just a week ago, Apple had faced a similar situation in the EU. It decided to hold the launch of Apple Intelligence, iPhone Mirroring, and enhancements to Apple's SharePlay in the EU region, fearing risk to user privacy and data security under the DMA.

Meta Vs EU

Meta has been getting in trouble with the EU for quite some time.

• Last month the company was facing investigations from the EU for using user data to train its AI models.
• Similarly in May, Facebook and Instagram (both owned by Meta) were criticized for not doing enough to ensure child safety on its platforms.
• And in March, Meta, along with Apple were warned about their new fee structures. According to the complaint, such service fees and practices went against the Digital Markets Act (DMA).

The DMA stands for Digital Markets Act. It's a new law that came into force in March and aims at keeping a market fair and competition-friendly.

It also requires big companies like Meta and Apple that control a larger portion of the industry to give more choices to users and to allow their rivals to thrive.

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