Meta Faces Deadline Over “Pay or Consent” Model Compliance
Meta has been given until September 1, 2024, to respond to consumer protection concerns raised by the European Union’s Consumer Protection Cooperation (CPC) Network. The CPC is investigating Meta’s “pay or consent” model, which forces users to either accept tracking and profiling for behavioral ad targeting or pay a monthly subscription for an ad-free experience. This model is under scrutiny for potentially breaching several EU regulations, including the Digital Markets Act (DMA) and the General Data Protection Regulation (GDPR).
The CPC network, led by the French directorate general for Competition, Consumer Affairs and Fraud Prevention, argues that Meta’s consent mechanism may involve “misleading or aggressive practices.” Concerns include the use of the term “free” when describing services that require users to allow their personal data to be used for ad targeting, as well as the pressure applied to users to make a quick decision under the threat of losing access to their accounts. The CPC also criticizes the lack of clear and sufficient information provided to consumers about the implications of their choices.
Meta’s response to these concerns has been to cite a ruling by the EU’s top court, claiming that subscription models as an alternative to advertising are well-established and compliant with European regulation. However, the CPC network remains unconvinced, highlighting that consumers may still see ads even if they opt for the paid version and that the navigation required to understand the terms is overly complex. The CPC’s coordinated action underscores the potential for significant enforcement measures if Meta fails to address these issues adequately.
Should Meta not comply with the CPC’s demands, national consumer protection authorities across the EU could impose penalties of up to 4% of Meta’s global annual turnover. This coordinated action by multiple EU consumer authorities signals that enforcement action could become financially burdensome for Meta if it does not make the necessary adjustments to its “pay or consent” model.
