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The European Commission claims that Meta’s “Agree or Pay” model violates consumer protection. The company has until September 1 to propose a solution, otherwise Meta faces further fines.
The European Commission claims that Meta’s “Agree or Pay” model violates consumer protection. The company has until September 1 to propose a solution, otherwise Meta faces further fines.
The European Commission has informed Meta that the “agree or pay” model for Facebook and Instagram violates consumer protection. Meta was already approached about this model earlier this month, but from the perspective of this model Digital Markets Act (DMA).
Meta acts as a gatekeeper within the DMA and must comply with all kinds of regulations. Now the model is also being questioned by consumer protection. The Consumer protection cooperation (CPC) of the EU gives Meta until September 1, 2024 to respond to the message and propose a solution.
Last year, Meta introduced a new model that gave users two options: either pay €12.99 per month to use Facebook and Instagram without ads, or pay nothing and give the company permission to collect personal data for personalized ads.
The European Commission was not satisfied with this and launched a preliminary investigation under the DMA. This resulted in a fine of up to ten percent of the company’s annual global turnover, i.e. more than 125 billion euros based on the 2023 figures.
The European Commission is going a step further and is now looking at Meta’s model from a consumer protection perspective. According to CPC members, the company uses confusing language to explain how both the paid and “free” versions of Facebook and Instagram work. Moreover, it would also be misleading to call the ad-free version free, as users would still have to consent to the use of their personal data for advertising purposes.
Under consumer protection law, the CPC accuses Meta of violating the Unfair Commercial Practices Directive and the Unfair Contract Terms Directive. For this, Meta risks a fine of up to four percent of annual turnover for the EU countries in which it is sued. The CPC gives Meta until September 1, 2024 to respond to the message and propose a solution.
Source: IT Daily
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