EU accuses Meta of violating Digital Market Act with Facebook and Instagram 'pay or consent' ad model

The European Commission has formally accused Meta, the parent company of Facebook and Instagram, of breaching the EU's Digital Markets Act (DMA) with its "pay or consent" advertising model. The preliminary findings, announced on Monday, allege that Meta's approach forces users to either pay for ad-free services or consent to extensive data collection for personalised advertising.
"Our preliminary view is that Meta's advertising model fails to comply with the Digital Markets Act," said Margrethe Vestager, Executive Vice-President in charge of competition policy. "And we want to empower citizens to be able to take control over their own data and choose a less personalised ads experience."
The Commission argues that Meta's model violates Article 5(2) of the DMA, which requires "gatekeepers" to offer users a less personalised but equivalent alternative if they refuse to consent to data combination across services. Regulators claim Meta's binary choice does not provide this option.
"Meta's 'pay or consent' business model is in breach of the DMA," stated Thierry Breton, Commissioner for Internal Market. "The DMA is there to give back to the users the power to decide how their data is used and ensure innovative companies can compete on equal footing with tech giants on data access."
The Commission's preliminary findings state that Meta's model "forces users to consent to the combination of their personal data and fails to provide them a less personalised but equivalent version of Meta's social networks." They further clarify that "users who do not consent should still get access to an equivalent service which uses less of their personal data, in this case for the personalisation of advertising."
Meta introduced the subscription model in November 2023, charging up to €12.99 per month for ad-free access to Facebook and Instagram in the EU. The company maintains that its approach complies with regulations.
"Subscription for no ads follows the direction of the highest court in Europe and complies with the DMA," a Meta spokesperson said. "We look forward to further constructive dialogue with the European Commission to bring this investigation to a close."
The Commission has until March 2025 to conclude its investigation. If found in violation, Meta could face significant penalties. If found in violation, Meta could face fines of up to 10% of its global annual turnover, potentially reaching $13.5 billion based on 2023 figures. The fines can go up to 20% in case of repeated infringement.
The case against Meta, following closely on the heels of charges against Apple, underscores the EU's determination to enforce its new digital regulations. Margrethe Vestager commented on the tech giants' responses to the new regulations, saying, "We are dealing with the biggest and most valuable companies on the planet. The DMA is not an excessive ask. [It] is plain vanilla to ask for a fair, open and contestable marketplace."