EU Poised to Take Legal Action Against Meta Over 'Pay or Consent' Policy

Regulators have expressed concerns about Meta's "pay or consent" model for its ad-free subscription service, arguing that it gives users a false choice and coerces them into agreeing to data tracking for advertising.

The European Union is preparing to charge Meta, Facebook's parent company, with violating the bloc’s significant digital regulations, according to a report from the Financial Times on Monday, citing sources familiar with the situation.

In preliminary findings expected to be released this week, regulators will highlight their concerns about Meta’s “pay or consent” model, the report indicates.

Meta introduced the no-ads subscription service for Facebook and Instagram in Europe last November. The company claimed that users who agree to be tracked can use the service for free, funded by advertising revenues, or they can pay to avoid having their data shared.

Per the FT report, regulators are anticipated to assert that Meta’s presented choice is misleading, as the financial barrier effectively forces users to consent to their data being tracked for advertising.

Meta and the European Commission did not immediately respond to Reuters' requests for comments.

This report follows EU antitrust regulators' recent charges against Apple for breaching the bloc’s tech regulations, a decision that could lead to a significant fine for the iPhone maker, which is also under investigation for imposing new fees on app developers.

The charge against Apple marks the first by the Commission under its Digital Markets Act (DMA), designed to curtail the power of ‘Big Tech’ companies and create a fairer market for smaller competitors.

Violations of the DMA can result in fines of up to 10% of a company’s global annual revenue.