European Union Finds Meta's 'Pay or Consent' Ads in Violation of Competition Law

Money | July 1, 2024, 11:23 a.m.

European Union regulators have accused Meta of violating the bloc's recent competition law by requiring Instagram and Facebook users in the EU to pay if they do not want their personal data used for targeted ads. Margrethe Vestager, the European Commission's executive vice president for competition policy, emphasized the importance of empowering citizens to control their data and opt-out of personalized ads. The investigation is part of the Digital Markets Act (DMA), the EU's first antitrust law targeting tech giants. Meta could face fines of up to 10% of its global annual revenue if found guilty. The EU argues that Meta's pay-or-consent model does not grant users the right to freely consent to data usage and fails to offer an alternative service with less data collection, as required by the DMA. Meta claims its "no ads" subscription model complies with the law and looks forward to resolving the issue with the European Commission. Critics fear internet sector overregulation will stifle innovation, while supporters view the DMA as a crucial measure to prevent tech companies from exploiting market power. EU regulators have also initiated inquiries into Apple and Alphabet, enforcing a one-year timeline for investigations. Despite Meta's attempt to demonstrate compliance by introducing the pay-or-consent option last year, the EU remains unconvinced.