The European Commission, also known as EC, issued a statement addressing Meta in the initial phase regarding the service format in the European region of “pay or accept terms” for displaying ads. This is seen as not in compliance with the Digital Markets Act (DMA) as there are no options to reduce personalized ads but instead receive an equivalent service.
This directive aligns with previous news indicating that Meta’s service format, including Facebook and Instagram in the European region, offers a monthly payment option in exchange for ad-free experience. Failure to choose this option would mean accepting terms to use personal data for ad targeting, prompting the European Commission to announce an investigation as it does not align with DMA regulations prohibiting unfair practices towards users by large online platforms.
Meta’s spokesperson clarified that the ad-free subscription format complies with European Union court guidelines and DMA laws. The company will engage with the EC on this matter moving forward.
In the next steps, the EC mentioned that Meta can challenge the allegations within 12 months from the start of the investigation on 25th March 2024. If found guilty, the maximum penalty is a fine of 10% of global revenue, which may increase to 20% for repeat offenses.
Source: European Commission and Reuters
TLDR: The European Commission scrutinizes Meta for its “pay or accept terms” ad display format in the EU, with possible penalties if found in violation of DMA regulations.
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