The European Commission is looking into whether the controversial decision that Meta has made regional users of its social networks, Facebook and Instagram, since last fall does not follow the Digital Markets Act (DMA) of the EU.
Meta and other so-called “gatekeepers” have had to follow the ex ante market contestability rule since March 7. If the adtech giant doesn’t, it could cost them a lot of money. If there are proven breaches, the fines can be up to 10% of the company’s total world income, or 20% if the same thing happens again.
More importantly, Meta might finally have to give up its business strategy that violates users’ privacy by making them agree to monitoring ads as a “price” of using its social networking services.
It was announced on March 25 that the EU would be starting a formal DMA investigation into Meta’s “pay or consent” offer to users. This comes after months of criticism from privacy and consumer protection groups, who say the subscription does not follow the EU’s data protection or consumer protection rules.
In March, the Commission, which is the only body that enforces the DMA, said it was worried that Meta’s two options—getting users of its social networks to agree to tracking and profiling them so it could keep showing them microtargeted ads, or paying up to almost €13 per month (per account) to use ad-free versions of the services—might not be “a real alternative” for people who don’t want Meta to collect and combine their data for ads.
The DMA is part of the EU’s plan to level the playing field in the market by going after the benefits that guardians can use because they are in charge, including in the data area.
The EU thinks that Meta’s ad unit has an unfair edge over rivals because it has a strong place in social networking and can get more information from web users to make profiles of them. Its tool to change the dynamic is a rule in the DMA that gatekeepers get permission from people to track them for ads. In its case against Meta, it says that the advertising tech giant is not giving people a free and fair way to say no to tracking.
The Commission released its preliminary results on Monday in a press statement. It said that Meta’s two options “force users to consent to the combination of their personal data and fails to provide them a less personalized but equivalent version of Meta’s social networks.”
Before the statement, top Commission officials met with reporters to stress that Meta’s social networking services must remain free for everyone to use. This means that the forms of those services that users don’t want to be tracked must also remain free.
Article 5(2) of the DMA applies in this case. It says that managers must get users’ permission before mixing their personal data between certain core platform services (CPS) and other services.
Since September 2023, Meta’s ads business and its social networks like Facebook and Instagram have both been labeled as CPS. This means that the adtech giant needs to get users’ permission to track and profile their behavior in order to show them what it calls “personalized” ads.
Users who don’t want Meta to track them have the legal right to an option that isn’t as personalized but is still the same. After about three months of researching, the Commission thinks Meta is breaking this rule because a paid contract isn’t the same as free access.
The rule also says that gatekeepers can’t make users’ permission necessary to use a service or some of its features.
In response to the EU’s results, Matthew Pollard, a spokeswoman for Meta, sent us an email with a message that was said to be from a company official. In it, Meta defends the method again by quoting a previous EU court decision. It says, “Subscription for no ads follows the direction of the highest court in Europe and is in line with the DMA.” We look forward to having more helpful conversations with the European Commission so that this review can be over.
During today’s meeting with the press, senior Commission officials were asked about this defense. The EU said that the decision Meta is talking about was when the Court of Justice said that a “appropriate fee” could only be charged “if necessary” when someone wanted to give a paid version of a service instead of tracking ads.
In the case of the DMA, the bloc’s inspectors say that a guardian would have to explain why a fee is needed. On top of that, the EU says that Meta could give an option to a totally agreed service that includes ads that don’t use personal data for targeting, like relevant advertising.
Meta has never said why it didn’t give users the choice of seeing related ads for free and instead made them choose between “pay or consent.”
In the coming months, though, the EU is likely to make Meta offer a non-binary option that is safe for privacy.
“To ensure compliance with the DMA, users who do not consent should still be able to access an equivalent service that uses less of their personal data,” the Commission said in a news statement. “In this case, this would be for personalizing advertising.”
According to the commission, Meta could still give a payment option. However, they stress that any paid option would have to be an extra one (like a third choice) that doesn’t require users to agree to being tracked.
The EU is still looking into things. And now Meta has a chance to give an official response to the early results. But there is only a short time for this to happen: The group has given itself a year to finish the investigation, which means it must be done by or before March 2025.
The European Consumer Organization (BEUC) liked the early results and urged the EU to move quickly with regulation.
Also Read: Meta’s New Ai Council is Made Up of Only White Guys
“The fact that the Commission is going after Meta’s pay-or-consent model under the Digital Markets Act is good news.” In the last few months, consumer groups have already brought complaints against Meta’s plan for breaking consumer law and data security law. There are now more complaints. “We now urge Meta to follow the laws that are meant to protect consumers,” said Agustin Reyna, the head of BEUC, in a statement.
What do you say about this story? Visit Parhlo World For more.
