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EU Regulators Accuse Meta Platforms of Breaching New Digital Market Laws
European Union regulators have leveled accusations against social media giant Meta Platforms, asserting that the company has violated the bloc’s new Digital Markets Act (DMA). The controversy centers around Meta's requirement for Facebook and Instagram users to either accept targeted advertisements or pay a subscription fee to avoid them. This practice has been in place since November, enabling European users to opt for ad-free versions of these social media platforms. Desktop users are charged approximately 10 euros ($10.50) monthly, while users on iOS and Android devices must pay around 13 euros.
Subscription or Consent: A Binary Choice
The introduction of the subscription option followed a ruling by the European Union's top court, which stipulated that under stringent EU data privacy laws, users must provide explicit consent before being shown targeted ads. However, the European Commission, the EU's executive branch, has preliminarily concluded that Meta's "pay or consent" model contravenes the 27-nation bloc’s DMA. The commission argues that this approach denies users the right to "freely consent" to the usage of their personal data for targeted advertising.
Investigation Underway
The investigation commenced shortly after the DMA was implemented in March. This act aims to prevent large tech firms, often referred to as "gatekeepers," from monopolizing digital markets, with the looming threat of substantial financial penalties for noncompliance. European Commissioner Thierry Breton, responsible for the bloc's digital policy, emphasized that the DMA is designed to return control of personal data to users and to ensure that innovative companies can compete fairly with tech behemoths regarding data access.
Meta now has the opportunity to respond to these findings. The commission's investigation is due to be concluded by March 2025. Should the accusations hold, Meta could face penalties amounting to 10% of its yearly global revenue, potentially reaching billions of euros. Meta has thus far maintained that their "subscription for no ads" model aligns with the directives of Europe's highest court and complies with the DMA. "We look forward to further constructive dialogue with the European Commission to bring this investigation to a close," the company stated.
Scrutiny Under the DMA
The Digital Markets Act classifies Meta as one of seven major online gatekeepers. Core platform services like Facebook, Instagram, and Meta's advertising arm are among about two dozen entities that the act subjects to the highest level of oversight. The outcome of this case could have broad implications for how tech giants operate within the EU, shaping the intersection of data privacy, user consent, and digital market regulation for years to come.
