Tech giant Meta is being accused of failing to comply with the EU’s landmark anti-trust laws.
On Monday, regulators from the region slammed the company for its newly introduced subscription that’s supported by ads.
The EC mentioned how such an option traps users into the cleverly designed pay or consent design which means users must either spend a lot of funds to withdraw or allow the company to track them down for targeted advertising.
This initiative was first rolled out by the organization last year through Meta’s Facebook and Instagram apps. Hence, an investigation has found that the model forces users to provide consent so Meta can use their personal information.
Meanwhile, the company’s spokesperson explained through a new statement how the model that comes supported with ads follows the high court’s executive decision and hence is in line with the Digital Markets Act.
They further explained how they were looking forward to a meeting with the EC where they hope to sit down and explain their side of the matter so that the investigation can come to an end soon.
Meta further revealed how the latest model in question is in reply to a decision from the EU court which stated clearly how a firm could offer a new version of the service that doesn’t put reliance on data collection for advertisements.
In the past, we’ve seen Meta mention how such a ruling is a top-of-the-line reason for rolling out such subscription offers.
The European Commission disagreed and explained that launching such models by Meta is a smart method that doesn’t give users a way out in terms of data collection of less personal information. Secondly, it’s equal to the method of making use of a personalized advertising service. So in both methods, it’s flourishing.
Regulators strongly feel that users need to be entitled to access in a way that uses less personal data, especially when it’s clear that this would be for ad purposes.
The other big reason why such a model is being shunned by the EU is that it fails to give users the right to use their freedom to consent for personal information used by Meta so that it can attain its relevant gains through online ads.
If Meta is indeed found guilty here, it would be forced to pay a hefty fine. Remember, the DMA has already come into play since March of 2024. So the law is aiming to crack down against any tech giant taking part in anti-competitive behavior while ensuring they open up options for archrivals in the industry.
As announced recently, fines could go up to 10% of the firm’s yearly revenue and repeated breaches may result in double that figure.
As far as Meta is concerned, if it indeed breached the DMA, it might be hit with a fine that surpasses the $13.4 billion mark, all depending on the firm’s earning figures each year.
Now that Facebook’s parent firm has received the investigation’s preliminary findings, the company would be given the chance to offer a defense in writing of what it feels in this regard.
The investigation by the EU was first rolled out in March, which is the same time that we saw two other similar investigations get launched against market-leading tech firms like Apple and Alphabet. So the investigation is expected to conclude within 12 months from the start of its proceedings.
Image: DIW-Aigen
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