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Is Meta's Ad-Based Subscription Service Breaking EU Rules?

Meta Accused

Overview:

On Monday, the EU accused Meta, Facebook's parent company, of not following important rules with their new ad-supported service.


The Issue:

Meta's new service, introduced last year for Facebook and Instagram in Europe, gives users two choices:

  1. Pay to use the platforms without ads.

  2. Agree to let Meta use their data for personalized ads.


EU's Concern:

The EU Commission believes this forces users to agree to data use without giving them a simpler option that doesn't use as much personal data.


Meta's Defense:

Meta says their model follows a ruling from the European Court of Justice, which allowed companies to offer an alternative service without relying on data collection for ads. Meta wants to work with the EU to resolve the issue.


EU's Findings:

The EU says Meta's service fails to comply with the rules for two main reasons:

  1. It doesn't provide a version that uses less personal data but is still equivalent to the personalized ads service.

  2. It doesn't let users freely consent to their data being used for ads.


Potential Consequences:

The EU's Digital Markets Act (DMA) became enforceable in March and targets anti-competitive practices by large digital companies. Companies can face huge fines, up to 10% of their global annual revenue, which could be around $13.4 billion for Meta.


Next Steps:

Meta can now defend itself in writing. The investigation, which also involves Apple and Alphabet, will be completed within a year.


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Key Points:

  • The European Commission called Meta's ad-supported service a "pay or consent" model. This means users must either pay to use Facebook and Instagram without ads or agree to let Meta use their data for ads.

  • Meta introduced this service in Europe last year to address privacy concerns from regulators.

  • If Meta is found to have broken EU antitrust rules, it could face a huge fine, potentially up to $13.4 billion.



FAQs

Q1. What is Meta’s new Subscription Service?

Meta’s new subscription service allows users to either pay to use Facebook and Instagram without ads or agree to let Meta use their data for personalized ads.


Q2. What did the EU accuse Meta of doing?

The EU accused Meta of not following important antitrust rules with their new ad-supported service for Facebook and Instagram.


Q3. What are the EU's main concerns with Meta's service?

The EU's main concerns are that the service forces users to agree to data use without offering a simpler, less data-intensive option and that it doesn't let users freely choose to consent to their data being used for ads.


Q4. How did Meta respond to the EU's accusations?

Meta says their service follows the European Court of Justice ruling and is willing to work with the EU to resolve the issue.


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