The European Commission released its initial findings on Meta's "pay or consent" advertising model, citing that it has violated the Digital Markets Act (DMA).
The Commission wrote in a press release that the tech giant's model fails to provide its customers with a less personalized but equivalent version of the concerned apps.
Meta Faces Scrutiny for DMA Violation
The DMA states that gatekeeper companies must seek users' consent before obtaining and offering related services to them. Under this rule, users who did not approve the consent must still have an equivalent alternative of access.
The preliminary finding of the Commission concluded that Meta is not compliant with the DMA. The tech giant "does not allow users to opt for a service that uses less of their personal data" and "does not allow users to exercise their right to freely consent."
Failure to comply with the regulation will be expensive for Meta. Penalties for finalized breaches can reach up to 10% of global annual turnover and up to 20% for repetitive offenses.
Meta Defends 'Pay or Consent' Model
Meta's pay or consent model was pushed upon the implementation of the DMA last March. The social media company offers targeted ads for users who will not pay the subscription fee of €13 per month (per account).
The subscription will provide an ad-free social media experience from Meta's apps and will not be served targeted ads. However, the Commission claimed that it is not "a real alternative"
"Subscription for no ads follows the direction of the highest court in Europe and complies with the DMA," said Matthew Pollard, Meta's spokesperson. He also stated that the company is looking forward to constructive dialogue with the Commission.
Once the preliminary findings are confirmed, Meta could face selling parts of the business in the region or banning from acquisition of additional services.
Related Article : EU Regulators Claim Apple Breaches Digital Markets Act
