The European Union has notified Meta, the parent company of Facebook and Instagram, that its personalized advertising model violates the Digital Markets Act (DMA).
The European Commission (EU), the EU's executive body, announced its preliminary findings on Monday, charging Meta with violating the Digital Markets Act, just a week after it made similar allegations against Apple.
Meta introduced its “pay-or-accept” model in the European Union in 2023 after European regulators ruled in 2022 that Meta must allow users to opt out of personalized ads based on their activity on its social media platforms.
The model requires users to pay a monthly fee to avoid seeing ads on Facebook and Instagram or receive personalized ads to continue using the free version.
“In the Commission’s preliminary view, this binary choice forces users to consent to the collection of their personal data and fails to provide them with a less personalized but equivalent version of Meta’s social networks,” the European Commission said on Monday.
Meta now has the opportunity to respond in writing to the preliminary findings of the investigation. The committee will complete its investigation within 12 months of its inception on March 25.
If Meta is ultimately found to be non-compliant by the regulator, it could face fines of up to 10% of its global revenue.
“The ad-free subscription follows the guidance of Europe’s highest court and is in line with the Digital Markets Act,” a Meta spokesperson said. “We look forward to further constructive dialogue with the European Commission to conclude this investigation.”
Last year, Meta also came under regulatory scrutiny in the European Union when it was fined $1.3 billion for transferring Facebook user data to the United States.
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