When Meta introduced a subscription option last year that would allow users in the European Union to pay for an ad-free experience on Instagram and Facebook, it was intended to fix regulatory issues the company was facing in the region.
Instead, the plan created new legal headaches.
On Monday, European Union regulators said Meta’s subscription, which costs up to €12.99 a month, amounted to a “pay or consent” system that required users to choose between paying a fee or of delivering more personal data to Meta to use for targeted advertising. .
Meta introduced the subscription last year as a way to deal with regulatory and legal scrutiny of its advertising-based business model. More troubling was the company’s combination of data collected about users on its various platforms — including Facebook, Instagram and WhatsApp — along with information gleaned from other websites and apps.
Meta argued that by offering a subscription, users had a fair alternative.
But regulators said Monday that the system was no option, forcing users to pay for privacy. Authorities said Meta’s policy violates the Digital Markets Act, a new law aimed at reining in the power of the biggest tech companies.
The law, known as the DMA, is intended to prevent big tech companies from using their size to force users to accept terms of service they would otherwise reject, including the collection of personal data. The concern was that platforms like Instagram and Facebook are so widely used that people have to choose between handing over their data or not signing up at all.
Regulators said the law required companies to allow users to opt out of having their personal data collected while still receiving a “less personalized but equivalent alternative” to the service.
“Meta’s ‘pay or consent’ business model violates the DMA,” said Thierry Breton, the European commissioner who helped draft the law. “The DMA is there to give back to users the power to decide how their data is used and to ensure that innovative companies can compete on a level playing field with the tech giants when it comes to data access.”
In a statement, Meta said the subscription service complied with the Digital Markets Act and would work with European regulators to resolve the investigation.
Last week, Nick Clegg, chairman of Meta, said Europe was falling behind economically because of over-regulation. “Europe’s regulatory complexity and patchwork of laws in different member states often makes companies reluctant to launch new products here,” he said.
Monday’s announcement is one step in a longer process. The European Commission, the executive arm of the 27-nation bloc, has until March to complete its investigation. If found guilty, Meta will face fines of up to 10 percent of its global revenue and up to 20 percent for repeat violations.
Meta is the second company to face charges under the Digital Markets Act. Last week, the commission brought charges against Apple for unfair business practices related to the App Store.
