EU Commission: Meta's "Agree or Pay" model violates the DMA
According to the EU Commission, Meta's approach of giving users the choice between paid subscription or consenting to personalized advertising violates the DMA.
According to the EU Commission's initial opinion, the pay or consent model violates the DMA.
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The "pay or consent" model, under which users of Meta services must consent to the use of personalized data for advertising or alternatively pay monthly for the service, is in breach of the Digital Markets Act (DMA). The European Commission informed Meta, which also includes Facebook and Instagram, of its preliminary finding of infringement on Monday.
The option to choose between payment or consent to the use of personalized data is incompatible with the DMA, the Commission explained in a statement. The gatekeeper platform must allow its users to use the services even if they do not consent to the use of their data for personalized advertising. Users must also have the same services and functions available to them in the event of an objection as with consent. This should not be dependent on consent to the use of data, explains the Commission.
Competitive advantage through size
The significant position of gatekeepers in the digital markets enables them to impose terms and conditions on their large number of users, allowing them to collect a large amount of personal data. This gives them a competitive advantage over smaller providers, as they have less access to such data and therefore face greater difficulties in marketing online advertising services.
The European Commission argues that Meta does not allow its users to choose a service that uses less personal data but is equivalent to one with personalized advertising. To comply with data protection law, users would need access to such a variant. Furthermore, Meta's approach does not allow users to "exercise their right to freely consent to the combination of their personal data".
Preliminary finding in the proceedings
The EU Commission has notified Meta of its preliminary finding. The company can now examine the documents and comment. The Commission will conclude its investigation within twelve months of the opening of proceedings on March 25, 2024. "If the Commission's preliminary view is ultimately confirmed, the Commission would adopt a decision finding that Meta's model is incompatible with Article 5(2) of the GDPR", the notification states.
If Meta does not comply with the regulations, the Commission can fine the company up to ten percent of its total global turnover. Systematic non-compliance could result in more severe sanctions, such as the sale of parts of the company.
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