The EU’s DMA fightback continues with Meta the next tech giant in line for big fines
- First Apple… Now Meta
- This time the accused is the social media giant who’s “pay or consent advertising model fails to comply with the Digital Markets Act (DMA).”
Following the European Commissions moves against Apple (following their unique interpretation of the EU’s Digital Markets Act) another tech giant is now feeling their wrath following similar bending of the DMA’s rules.
This time the accused is social media giant Meta who’s “pay or consent advertising model fails to comply with the Digital Markets Act (DMA).”
In an extensive press release from the EU Commission, the trade body spells out their grievance and just where Meta is at fault.
“In the Commission's preliminary view, this binary choice forces users to consent to the combination of their personal data and fails to provide them a less personalised but equivalent version of Meta's social networks,” they write.
This binary choice forces users to consent to the combination of their personal data and fails to provide them a less personalised but equivalent version of Meta's social networks.
The move effectively strikes at the very heart of Meta’s business via platforms such as Facebook and Instagram. That is, in order to use the service they supply, users and advertisers have to part with money or personal data in order to ‘play’.
The EU argues now that such moves have “given them potential advantages compared to competitors who do not have access to such a vast amount of data, thereby raising high barriers to providing online advertising services and social network services.”
What's the problem?
The DMA’s Article 5(2) states that should a user decide not to offer up their personal data then they should still have access to “a less personalised but equivalent alternative experience". However, Meta’s attempt to introduce a payable fee to avoid the use of data and the dodging of advertising, is now attracting EU ire.
The latest claims address the “pay or consent” system Meta introduced in November 2023, being a binary decision where users can either opt for the payment of a monthly fee for an ads-free version of their social networks or enjoy free-of-charge access with the presence of personalised ads.
Meta’s moves fall foul of the DMA in that they do not allow users to opt for a service that uses less of their personal data but is otherwise equivalent to the “personalised ads” based service. And they do not allow users to exercise their right to freely consent to the combination of their personal data.
In short users are expected to grant more than EU thinks is fair, in order to use their service and at present Meta are not offering an equivalent version of their service for those who don’t want to agree to their rules.
Users are expected to grant more than EU thinks is fair, in order to use their service and at present Meta are not offering an equivalent version of their service for those who don’t want to agree to their rules.
Tech giants beware
“Our investigation aims to ensure contestability in markets where gatekeepers like Meta have been accumulating personal data of millions of EU citizens over many years,” says Margrethe Vestager, Executive Vice-President in charge of competition policy.
“Our preliminary view is that Meta’s advertising model fails to comply with the Digital Markets Act. And we want to empower citizens to be able to take control over their own data and choose a less personalised ads experience”
“Today we make another important step to ensure full compliance with the DMA by Meta,” adds Thierry Breton, Commissioner for Internal Market. “Our preliminary view is that Meta’s “Pay or Consent” business model is in breach of the DMA. The DMA is there to give back to the users the power to decide how their data is used and ensure innovative companies can compete on equal footing with tech giants on data access.
So what happens now?
Meta can of course choose to defend itself - these are just the Commission’s preliminary views after all - but if the Commission eventually decides (within 12 months from the opening of proceedings on 25 March 2024) that Meta is at fault, it can impose fines up to 10% of the gatekeeper's total worldwide turnover.
And in further fighting talk the EU notes that: “Such fines can go up to 20% in case of repeated infringement. Moreover, in case of systematic non-compliance, the Commission is also empowered to adopt additional remedies such as obliging a gatekeeper to sell a business or parts of it or banning the gatekeeper from acquisitions of additional services related to the systemic non-compliance.”
“The Commission continues its constructive engagement with Meta to identify a satisfactory path towards effective compliance."
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