To comply with the European Union’s Digital Markets Act, Meta Platforms – the parent company of Facebook and Instagram – has offered to slash its monthly subscription fee for both social media platforms by half from 9.99 EUR to 5.99 EUR.
According to a senior Meta executive who proposed the plan to regulators, the price cuts aim to address concerns related to privacy and competition that were raised by activists and consumer groups about the company’s ad-free subscription service.
Meta Cuts Subscription Fee in Compliance with the EU’s Data Protection Laws
The company was criticized for requiring users to pay a monthly charge to ensure their privacy on Facebook and Instagram. Meta launched the service in November to comply with the EU’s Digital Markets Act (DMA), which curbed its ability to personalize ads for users without their consent. A major blow to the company’s largest revenue source.
At a European Commission hearing, Meta lawyer Tim Lamb explained that the company had “wanted to accelerate that process for some time” and hence has offered to drop the price to 5.99 EUR for single accounts and 4 EUR for any additional accounts.
Meta made the reduced offer to regulators earlier this year and is currently in talks with the Data Protection Commission in Ireland, where its European headquarters is located. The tech giant claimed that its fee model balanced out the conflicting demands of EU privacy laws and the DMA.
Lamb also added that the updated fee structure is “by far the lowest end of the range that any reasonable person should be paying for services of this quality”.
Currently, this is the only way Facebook and Instagram users can avoid Meta’s tracking and profiling.
Last year, Meta briefly allowed regional users who exercised a right to object to its tracking to opt out of sharing their data for ads. This was while it was claiming a legitimate interest (LI) in ad processing. The move came following the company’s earlier claims of personalizing ads as a “contractual necessity” was found to breach Europe’s data protection rules back in January 2023.
The Only Way to Stop Meta From Collecting Data for Ads is by Opting the Subscription Model
The EU Court of Justice denied Meta’s ability to claim an LI for data and ad processing, which resulted in the tech firm shifting its position to that of consent. However, activists came out blaring at the company’s controversial subscription model, stating that it was offering users a Hobson’s choice of either paying money to get exclusive ad-free access to the mainstream social networks or continuing to use those platforms for free, but at the cost of privacy.
Critics say that Meta’s approach relies on economic coercion that manipulates users into unwillingly accepting tracking. They also argue that the company does not comply with the bloc’s General Data Protection Regulation (GDPR), according to which, consent should be freely given to the platforms’ users.
Under the Digital Markets Act, Meta is considered to be a ‘gatekeeper’ of “core platform services” that include Facebook and Instagram. The regulation puts a limit on how gatekeepers can use people’s data for advertising purposes, requiring that they obtain explicit consent from users before doing so.
Companies that Violate the DMA Risk Being Fined 10% of Their Annual Turnover
Meanwhile, the DSA, which designates both Facebook and Instagram as very large online platforms (VLOPs), also limits the use of people’s data for ads. Both laws emphasize the need for compliance with the EU’s GDPR.
Gatekeepers’ consent with the DMA and VLOP is overseen by the European Commission, whereas, Meta’s compliance with the GDPR is led by the Irish DPC.
The day-long hearing seeks to give Meta users and third-party service providers more clarity on how it complies with the DMA. Users who consent to be tracked will receive a free service with personalized ads. However, companies that violate the DMA would risk being fined as much as 10% of their annual global turnover.
