EU officials say Meta may be violating consumer laws with paid 'ad-free' plan
That's on top of a potential Digital Markets Act breach.
The European Commission really isn't happy about a Meta business model that gives users in the EU, European Economic Area and Switzerland the generous choice of continuing to use Facebook and Instagram with targeted ads without paying anything, or signing up for a monthly subscription that's said to offer an ad-free experience.
Officials from the Consumer Protection Cooperation (CPC) Network — a group of national authorities that enforce EU consumer protection laws — have suggested that Meta may be violating consumer legislation with the "pay or consent" approach. The Commission, which is the European Union's executive arm, coordinated the group's action against Meta.
The CPC Network sent Meta a letter laying out numerous ways in which it believes the company may be violating consumer laws. The company has until September 1 to reply and propose solutions to officials' concerns. If CPC officials find that Meta doesn't take appropriate steps to solve the problems, they could take enforcement actions against the company, which may include sanctions.
CPC authorities have suggested that Meta is misleading users by describing its platforms as free to use if they opt not to pay for a subscription, when Meta in fact monetizes their personal data by displaying targeted ads. They further say that Meta is "confusing users" by requiring them to access different areas of the privacy policy and terms of service to see how their data is being used for personalized ads.
Officials have also taken aim at Meta's "imprecise terms and language" that suggest subscribers will not see ads at all, even though those still might be displayed "when engaging with content shared via Facebook or Instagram by other members of the platform." Furthermore, they claim Meta is pressuring users who have long used Facebook and Instagram without forking over any payment "to make an immediate choice, without giving them a pre-warning, sufficient time and a real opportunity to assess how that choice might affect their contractual relationship with Meta, by not letting them access their accounts before making their choice."
Meta introduced its "pay or consent" options last year in an attempt to comply with the EU's data protection laws while maintaining its advertising model. CPC officials say they are concerned that "many consumers might have been exposed to undue pressure to choose rapidly" between consenting to data collection or paying a monthly fee, "fearing that they would instantly lose access to their accounts and their network of contacts."
This action is separate from other investigations the EU is carrying out against Meta over the "pay or consent" model. Earlier this month, the EU said Meta had potentially breached the Digital Markets Act with this approach. If found guilty, Meta could be on the hook for a fine of up to 10 percent of its global annual revenue.
In addition, the Commission requested more information from the company in March about the "pay or consent" model under the Digital Services Act, another law the bloc designed to keep the power of major tech companies in check. Not only that, consumer rights groups have filed complaints arguing that the approach violates the EU's General Data Protection Regulation.
