On Monday, the European Commission (EC) announced that Meta’s pay-or-pay advertising model violates the Digital Markets Act (DMA). The EC stated that Meta’s binary choice of paying for ads or opting in to personalized ads does not provide users with a less personalized option. Meta introduced this model in the EU in 2023 after being instructed to allow users to opt out of personalized ads in 2022.
The EC began its investigation on March 25 and will complete it within 12 months. If Meta is found non-compliant, it could face fines of up to 10% of its global revenue. In response, a spokesperson for Meta said that the ad-free subscription option is compliant with a court ruling in Europe and is DMA compliant. The company is committed to engaging in constructive dialogue with the EC to resolve the investigation.
Last year, Meta faced a $1.3 billion fine for transferring user data to the US, and now they are facing scrutiny for potential DMA violations. Additionally, Apple has also been notified of potential DMA violations by the EC. The preliminary findings show that Apple’s app store rules violate the law by restricting app developers from directing consumers to other channels for offers and content.
The EU continues to monitor and enforce regulations to ensure fair competition in digital markets, as it seeks to protect consumers’ privacy rights while promoting innovation and growth in tech companies like Meta and Apple.