European Commission to Investigate Meta Subscription Model – Source: www.databreachtoday.com

Governance & Risk Management
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Privacy
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Standards, Regulations & Compliance

‘Pay or Consent’ May Violate the Digital Services Act, Say EU Officials

Akshaya Asokan (asokan_akshaya) •
March 25, 2024    

The European Commission will scrutinize Meta’s pivot to a subscription model in trading bloc countries in response to a string of rulings from data protection boards limiting the social media giant’s ability to legally collect user data.

See Also: The Ultimate PIA and DPIA Handbook for Privacy Professionals

The commission on Monday announced an investigation into the subscription model and also announced a slew of investigations into American big-tech companies. The investigations seek to determine whether Google illegally preferences its vertical search products, such as Google Shopping, over rival services and whether Apple gives users enough choice when configuring smartphones, such as by making it easy to uninstall apps or change the default settings. The commission opened the investigations by invoking the Digital Markets Act, a European Union digital economy regulation that went into effect last May.

The investigation into Meta will examine if the company violated regulation by not giving users a real choice when it required them either to pay or consent to having their personal data harvested.

“The commission is concerned that the binary choice imposed by Meta’s ‘pay or consent’ model may not provide a real alternative in case users do not consent, thereby not achieving the objective of preventing the accumulation of personal data by gatekeepers,” the commission said.

In a press conference, Commissioner for Internal Market Thierry Breton said Europe is specifically investigating whether Meta broke DMA rules that stop online services designated as gatekeepers from using without consent personal data harvested from one platform, such as Meta-owned WhatsApp, on another platform, such as Meta Instagram, for purposes such as advertising.

“The DMA is very clear: Gatekeepers must obtain users’ consent to use their personal data across different services. And this consent must be free. We have serious doubts that this consent is really free when you are confronted with a binary choice,” he said.

Meta did not immediately respond to a request for comment. Violations of the DMA can cost companies 10% of global revenue – and up to 20% for repeat violations. The commission could also decide to force violators to break up by selling portions of their businesses.

The probe comes just days after days after European lawmakers wrote to the president of global affairs of Meta criticizing the subscription model as a commoditization of human rights (see: Pressure Mounts on Meta to Scrap ‘Pay or OK’ Model in EU ).

Critics of behavioral advertising say it violates individual privacy unless explicitly authorized by users who have the ability to continue to use online services even if they reject web browsing tracking. The lawmakers say that pan-European privacy regulations allow trading bloc residents to access online services such as Facebook and Google without having to give up their personal data – or having to pay extra for withholding it.

Meta began offering subscriptions after the European Data Protection Board rejected Facebook’s legal invocation of the General Data Protection Regulation’s justification of “legitimate interests” for data processing. Facebook also can’t use its terms and conditions – with provisions for ad personalization – as a binding contract on users, European data protection regulators have ruled (see: Europe Clamps Down on Meta Ad Personalization).

Meta recently slashed its pricing for consent from 9.99 euros per month to 5.99 euros for Facebook and Instagram, Reuters recently reported.