The European Union has taken action against Meta, Facebook’s parent company, for allegedly violating its new digital regulations just a week after launching a similar case against Apple.
The EU’s executive body, the European Commission, is leveraging its new authority under the Digital Markets Act (DMA), legislation designed to enhance consumer choice and foster competition among European startups. Compliance with these rules has been mandatory since March.
In preliminary findings released Monday, EU regulators expressed concerns about Meta’s “pay or consent” model.
Currently, Facebook and Instagram users can use the platforms for free by consenting to data collection or paying a fee to avoid sharing their data. The regulators argue that Meta’s current model is a very misleading NY design that confuses them, potentially coercing users into consenting to data tracking due to the financial burden of the alternative, as per a report by the Financial Times.
According to the EU’s new digital rules, tech companies must obtain user consent to merge or use personal data across core services. This regulation occurred in March, when compliance investigations were initiated against Meta and other major tech firms.
The European Commission stated that Meta users without consent should still have access to an equivalent service that uses less of their data, particularly for ad personalization.
Thierry Breton, the EU’s internal market commissioner, remarked that Meta’s “pay or consent” business model violates the DMA. Breton also emphasized that the DMA aims to empower users to control their data usage and ensure a level playing field for innovative companies against tech giants.
Meta responded with a statement asserting that its subscription model for ad-free usage aligns with the direction of Europe’s highest court and complies with the DMA. The company was willing to engage in constructive dialogue with the European Commission to resolve the investigation.
If Meta is found in breach of the DMA, it could face significant penalties, including fines of up to 10 percent of its global turnover and up to 20 percent for repeated offences. The EU needs to finalize its preliminary findings within a year from the start of the official investigation in March.
Last Monday, the EU accused Apple of stifling innovation in its App Store, marking the first use of its new powers against a major tech company. Regulators expressed concerns about Apple’s restrictions on developers’ ability to direct customers to promotions outside its ecosystem. Apple has denied any wrongdoing.
The recent charges against Meta indicate that Brussels is committed to swiftly addressing alleged anti-competitive behavior. An anonymous antitrust lawyer noted that Big Tech is a priority for the EU, acknowledging that traditional competition law enforcement needs to be faster and more effective.
