Report from Reuters
In Brief – BEUC, a non-profit organization that represents European consumers, has expressed to EU data protection and competition enforcement authorities that it believes Meta’s latest subscription policy violates consumer and data protection laws as well as the EU Digital Markets Act. In late 2023, Meta offered its first paid subscription versions of Facebook and Instagram. Privacy advocates and data protection regulators objected to the plan they dubbed “pay or consent.” Later, EU competition regulators ruled that the Digital Markets Act (DMA) “gatekeeper” law requires Meta to offer free versions that only employ less personalized “contextual ads”. Meta responded with a new free option that employs less-targeted ads, as well as lowering the price for their ad-free subscriptions. BEUC argues that Meta’s new offering involves misleading language, steers users to their standard targeted ad version, fails to gain free consent to process data for ads, fails to minimize the data collected, and continues to degrade the services offered to users who fail to consent to the use of their data.
Context – Meta still argues that offering consumers a paid, ad-free, option is consistent with European High Court rulings and that intentionally less effective online advertising harms small businesses with small ad budgets. Although neither the GDPR nor the DMA ban highly targeted advertising, if EU enforcers and courts interpret the laws to require the largest platforms to offer versions that are free and use far less-efficient, low-value, low-price advertising, it will reverberate throughout the digital ad ecosystem, including publishers, advertisers, and ad services providers. In the UK, the country’s data protection authority is releasing its own guidance on “consent or pay”, casting a wider net that covers publishers, including media sites, and the largest platforms, and claiming a business friendly mantle by indicating that most publishers will be allowed to offer a simple ad-free paid option while the largest platforms will likely be held to the emerging EU model requiring a free option with poorly-targeted ads. Will it be a distinction with a difference?