The EU on Monday accused Facebook owner Meta of breaching the bloc’s digital rules, paving the way for potential fines of billions of euros.
The charges against the US tech titan follow a finding last week against Apple, which marked the first time Brussels has brought formal charges under the EU’s Digital Markets Act (DMA).
The latest case centers on Meta’s new ad-free subscription model for Facebook and Instagram, which has sparked multiple complaints over privacy concerns.
Meta’s “pay or consent” system means that users must pay to avoid data collection or agree to share their data with Facebook and Instagram to continue using the platforms for free.
The European Commission said it informed Meta of its “preliminary view” that the model released by the company last year “does not comply” with the DMA.
“This binary choice forces users to consent to the combination of their personal data and fails to provide them with a less personalized but equivalent version of Meta’s social networks,” the powerful EU antitrust regulator said in a statement.
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The findings come after the Commission launched an investigation into Meta in March under the DMA, which forces the world’s biggest tech companies to comply with EU rules designed to give European users more choice online.
Meta insisted that its model is “DMA compliant”.
“We look forward to further constructive dialogue with the European Commission to complete this investigation,” a Meta spokesperson said.
Meta can now respond to the findings and avoid a fine if it changes the model to address EU concerns.
However, if the panel’s view is upheld, it may impose fines of up to 10 percent of Meta’s total global turnover under the DMA. This can be increased by up to 20 percent for repeat offenders.
Meta’s total revenue last year was around $135 billion (€125 billion).
The EU also has the right to dissolve businesses, but only as a last resort.
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In the EU’s sights
Under the DMA, the EU designates Meta and other companies, including Apple, as “gatekeepers” and prevents them from forcing users of the block to consent to access a service or certain features.
The commission said Meta’s model did not allow users to “freely consent” to having their data shared between Facebook and Instagram with Meta’s ad services.
“The DMA is there to empower users to decide how their data is used and to ensure that innovative companies can compete on a level playing field with the tech giants when it comes to access to data,” said the top technology enforcer. of the EU, Commissioner Thierry Breton.
The committee will make a decision on whether Meta’s model is DMA compliant or not by the end of March 2025.
The EU has shown it is serious about making big online companies change their ways.
The commission told Apple last week that its App Store rules prevent developers from freely pointing consumers to alternative channels for offers.
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The EU is also investigating Google over similar concerns in the Google Play marketplace.
Apple and Meta aren’t the only companies that fall under the scope of the DMA. Google parent Alphabet, Amazon, Microsoft and TikTok owner ByteDance must also comply.
Online travel giant Booking.com will have to comply with the rules later this year.
Privacy Complaints
Meta has made billions from harvesting user data to serve highly targeted ads. But it has faced an avalanche of complaints about its data processing in recent years.
The European data regulator in April also said the “pay or consent” model conflicts with the bloc’s General Data Protection Regulation (GDPR), which protects the privacy of users’ information.
Ireland — a major hub for online tech giants operating in the 27-nation bloc — has slapped Meta with huge fines for breaching the GDPR.
The latest complaint from privacy groups forced Meta last month to halt plans to use personal data to train its AI technology in Europe.
Source: AFP