The EU Accuses Meta of Violating Antitrust Rules

EU regulators have recently accused Meta, the parent company of Facebook, of failing to comply with antitrust rules regarding its ad-supported social networking service. The Commission claims that Meta’s subscription model restricts users to either pay for an ad-free experience or consent to their data being used for personalized advertising, failing to offer a less personalized option.

In response to the accusations, a spokesperson from Meta stated that their ad-supported subscription model follows the direction of the highest court in Europe and complies with the DMA. Meta implemented this new model after a ruling from the European Court of Justice allowed companies to offer alternative versions of their services that do not rely on data collection for ads.

The EU regulators cited two key reasons for Meta’s ad-supported service violating the DMA. First, it does not allow users to opt for a service that uses less personal data but remains equivalent to the personalized ads-based service. Second, it does not give users the ability to freely consent to their personal data being used for targeted online ads.

The Digital Markets Act (DMA), which officially became enforceable in March of this year, aims to combat anti-competitive practices by large digital companies. Under the DMA, companies like Meta could face substantial fines, such as up to 10% of their global annual revenue or even 20% for repeated breaches. Meta could potentially be penalized with a fine of $13.4 billion based on their 2023 annual earnings if found in violation of the DMA.

After receiving the EU’s preliminary findings, Meta has the opportunity to defend itself in writing before the Commission’s investigation concludes within 12 months from the start of proceedings. The investigation was launched in March along with two other probes into tech giants Apple and Alphabet.

Overall, the accusations against Meta by EU regulators raise concerns about the company’s compliance with antitrust rules and the protection of user data. It remains to be seen how Meta will address these allegations and whether any penalties will be imposed on the company.