Commission Preliminarily Finds Meta Pay or Consent Model Breaches the Digital Markets Act

Meta introduced the model in November 2023 in response to regulatory changes in the EU. Users of Facebook and Instagram must choose between a monthly subscription to an ads-free version of the services or free access to a version with personalised advertising.

What the DMA requires

Under Article 5(2) of the DMA, gatekeepers must seek users' consent before combining personal data between designated core platform services and other services. A user who refuses consent should still have access to a less personalised but equivalent alternative, and a gatekeeper cannot make the use of a service or certain functionalities conditional on that consent.

The Commission's preliminary view is that the model does not allow users to opt for a service that uses less of their personal data but is otherwise equivalent to the personalised ads service, and does not allow them to exercise their right to freely consent to the combination of their data. The Commission said it had coordinated with data protection authorities throughout the investigation.

Possible consequences

If its preliminary views are confirmed, the Commission would adopt a decision finding that the model does not comply with Article 5(2). Fines under the DMA can reach 10% of a gatekeeper's total worldwide turnover, and up to 20% for repeated infringement. In cases of systematic non-compliance, the Commission may also impose additional remedies, such as obliging a gatekeeper to sell a business or parts of it, or banning it from acquiring related services.

What happens next

Meta can now examine the documents in the investigation file and reply in writing. The findings are without prejudice to the outcome of the case. The Commission has said it will conclude the investigation within 12 months of the opening of proceedings on 25 March 2024, when it also opened non-compliance investigations concerning Alphabet and Apple.

For advertisers and platforms active in the EU, the case is an early test of how the DMA's consent rules apply to subscription-based alternatives to personalised advertising.

Sources

• European Commission: Commission sends preliminary findings to Meta over its "Pay or Consent" model for breach of the Digital Markets Act
• European Commission: Commission opens non-compliance investigations against Alphabet, Apple and Meta under the Digital Markets Act