Meta Platforms among those designated as “gatekeepers” of online services by EU commission.
Under the European Union’s Digital Markets Act (DMA), companies with more than 75 billion euros in market capitalization and 45 million monthly active users are considered as “gatekeepers”.
Companies labelled as such will be required to make their messaging apps interoperate with that of rivals and allow users to decide which apps to pre-install on their devices.
A fine of up to 10% of annual global turnover will be imposed on any company that violates the DMA act.
The “gatekeepers” will have six months to comply with the DMA obligations.
Under advertising, Meta will be required to seek user consent before using their data for advertising purposes. Business customers will be empowered to ask for data used in their compaigns. I think this will impact Advantage+ Campaigns, where customers complained that they couldn’t access such data.
Under messaging, users would be able to message others via other apps such as Signal and Telegram directly when in Facebook Messenger and WhatsApp.
Under marketplace, Meta will be banned from giving its products and services preferential rankings over alternatives.
Meta starts implementing the Digital Markets Act (DMA) in WhatsApp.
WABetaInfo reports that a new android version of WhatsApp has a new screen called “third-party chats”, which enables users to receive messages from people using other messaging tools.
Meta Platforms wants to charge European users $10.50 a month to use Instagram or Facebook free of ads on desktop, roughly $17 to use both accounts, and roughly €13 to use either account on mobile devices, that’s according to the Wall Street Journal.
Meta wants to roll out the plan in the coming months.
The New York Times reported last month that Meta was considering coming up with the plan, but had not given the pricing as well as the timeline.
Meta spokesperson said Meta believes in “free services which are supported by personalized ads” but looking for “options to ensure we comply with evolving regulatory requirements.”
Ireland’s Data Protection Commission as well as the European Commission has not responded to the claims.
Europe accounted for 22% of Meta’s revenue in 2022.
Meta introduces an ad-free subscription plan for Facebook and Instagram users in the EU, European Economic Area and Switzerland in order to comply with EU regulations on personalized ads.
"In its ruling, the CJEU expressly recognised that a subscription model, like the one we are announcing, is a valid form of consent for an ads funded service, " Meta said.
The subscription will cost 9.99 euros per month for web users and 12.99 euros per month for iOS and Android users and will apply to all linked Facebook and Instagram accounts in a user’s Accounts Center until March 1, 2024.
From March 1, 2024, web will attract an additional fee of 6 euros per month while iOS and Android will charge an additional 8 euros each month for each additional account listed in a user’s Account Center.
Meta said this subscription model was factored into its most recent business outlook and guidance.
The Wall Street Journal reported about this subcription early this month though the pricing was a bit different from the one announced today.
It seems the decision to offer the subscription plan has not been greenlighted by the data protection authorities yet.
“Acting in consultation with its fellow European supervisory authorities, the DPC has been engaged in a detailed regulatory assessment of the consent-based model since it was first proposed by Meta in July. That exercise is being led by the DPC, reflecting its position as Lead Supervisory Authority for Facebook and Instagram in Europe. The exercise has not yet concluded, and no findings have been made to date. It is due to be completed shortly, at which point the DPC will notify Meta if it considers that the manner in which its new user offerings are to be implemented is compatible with Meta’s obligations under GDPR,” Ireland’s Data Protection Commission (DPC) told Techcrunch.
Advocacy group None Of Your Business (NOYB) has filed a complaint with the Austrian regulator against Meta’s ads-free subscription model arguing that it amounts to paying a fee to ensure privacy.
“EU law requires that consent is the genuine free will of the user. Contrary to this law, Meta charges a ‘privacy fee’ of up to 250 euros per year if anyone dares to exercise their fundamental right to data protection,” NOYB data protection lawyer Felix Mikolasch said in a statement.
“Not only is the cost unacceptable, but industry numbers suggest that only 3 percent of people want to be tracked – while more than 99 percent don’t exercise their choice when faced with a ‘privacy fee,’” the group said. “If Meta gets away with this, competitors will soon follow in its footsteps.”
The complain is expected to be forwarded to the Irish Data Protection Commission which oversees Meta.
A coalition of almost 20 consumer protection organizations in Europe has also criticized Meta’s ad-free subscription model terming it as “unfair” and “illegal”.
The coalition said they will file a complaint with the network of consumer protection authorities (CPC) today.
To comply with the DMA Act, Meta said it will give its EU, EEA and Switzerland Instagram and Facebook users more choices on how they consume its services.
In the next few weeks, Facebook Messenger users can choose to link their accounts with Facebook or have separate accounts.
Facebook and Instagram users can also choose to menage their accounts separately or have them connected.
Users will also be able to choose if to share their Facebook account information with Meta’s Gaming and Marketplace services.
Meta offers to reduce its montly subscription of Facebook and Instagram in the EU to 5.99 euros from 9.99, Reuters reported citing a Meta executive.
“We have wanted to accelerate that process for some time because we need to get to a steady state…so we have offered to drop the price from 9.99 to 5.99 for a single account and 4 euros for any additional accounts,” Meta lawyer Tim Lamb told a European Commission hearing.
The offer was made to the regulators earlier this year.
EU opens investigations into Meta and others for suspected non-compliance with the Digital Markets Act (DMA).
“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 statement.
The commission said it plans to conclude the investigations within 12 months.
“In case of an infringement, the Commission can impose fines up to 10% of the company’s total worldwide turnover. Such fines can go up to 20% in case of repeated infringement,” it added.
In response, Meta said its subscription model complies with the DMA, adding that its validity has been recognized by regulators in Germany, Denmark and France.
I=6 Meta’s “Pay or Consent” doesn’t comply with DMA, EU preliminary findings say
Following the rejection of the European Data Protection Board, the EU Commission’s preliminary findings indicate that Meta’s “pay or consent” advertising model does not comply with the EU’s Digital Markets Act (DMA).
“In the Commission’s preliminary view, this binary choice forces users to consent to the combination of their personal data and fails to provide them a less personalised but equivalent version of Meta’s social networks,” the EU Commission said in a statement.
The commission said the next step is for Meta to exercise its rights of defence by examining the preliminary documents and reverting back to the commission.
If the commission’s preliminary findings are confirmed latest March 2025, a fine of up to 10% of Meta’s global turnover could be imposed.
In response, a Meta spokesperson told Reuters that the model complies with a EU top court ruling.
“Subscription for no ads follows the direction of the highest court in Europe and complies with the DMA. We look forward to further constructive dialogue with the European Commission to bring this investigation to a close,” the spokesperson said.
Assessment
Though the EU Commission looks serious on reigning on big tech using the DMA, there have been views that the act could be difficult to enforce just like the GDPR which came into force in 2018. The GDPR has only imposed fines amounting to just over 4 billion euros, with Meta’s fine of 1.2 billion euros in 2023 being the highest. One can argue that GDPR fines (maximum of 4% of the firm’s global turnover) are less than that of DMA but a recent fine of 1.8 billion euros (under DMA) on Apple could point that the later could be as well be hard to enforce. Apple’s anticompetitive practices against music streaming services had received so much attention that a 1.8 billion euros look small. As such, I won’t expect Meta’s fine to exceed 2 billion euros. That’s supposing it would be fined.
Still, if Meta is fined by the EU Commission, it could challenge it in EU’s top court and if the model already complies with the court’s ruling as Meta says then it stands a great chance of winning.
The EU Commission is expected to impose a fine on Meta Platforms for tying its Marketplace with Facebook- giving it unfair advantage, people familiar with the matter told Reuters.
In December 2022, the Commission accused Meta Platforms of defying antitrust laws by tying the Marketplace with Facebook.
The fine could be 10% of Meta’s 2023 global turnover though the Commission’s fine is usually much lower.
I=5 A hefty EU fine on Meta for linking its marketplace with social media is expected as early as next month, but the case could take years to be completed
The EU Commission is likely to impose a hefty fine on Meta Platforms for dominating the ad market by linking its Marketplace with its social media network, people familiar with the matter told Financial Times.
Two months ago, Reuters published a similar report citing people familiar with the matter.
The decision is expected as early as next month before the commission’s competition boss, Margrethe Vestager leaves office.
If found guilty, Meta could face a penalty of up to 10% of its global turnover which was $135 billion in 2023 though the regulator usually issues a much lesser fine.
Meta could also appeal against the case.
Assessment
Some of the notable antitrust fines imposed by the commission include a 2016 €1.5 billion imposed on Google which was overturned today by a EU court, a 2017 €2.42 billion fine on Google which was confirmed last week by a EU court and a €4.34 billion imposed on Google in 2018 (which is under appeal) . As such, I don’t expect a fine exceeding 2 billion euros given the importance of Marketplace to Meta Platform’s revenue. Also, given that Meta will likely appeal against the fine, the case could take years to be completed.
I=7 Meta fined €798 million by the EU antitrust commission for giving its Marketplace unfair advantage
EU antitrust regulator has fined Meta €798 million for tying its Marketplace to its social media network and for imposing unfair trading conditions on rivals.
The commission has asked Meta to stop the infringements.
“Today we fine Meta €797.72 million for abusing its dominant positions in the markets for personal social network services and for online display advertising on social media platforms. Meta tied its online classified ads service Facebook Marketplace to its personal social network Facebook and imposed unfair trading conditions on other online classified ads service providers. It did so to benefit its own service Facebook Marketplace,” EU antitrust boss, Margrethe Vestager, said.
Meta said it will appeal the decision, a process that could take sveral years to complete.
Assessment
The fine was much less than I expected. Also, an appeal could take several years to complete giving Meta time to make changes to meet the antitrust laws.
European Commission is reassessing its probes into Meta, Apple, and Google amid calls for Trump to intervene
The European Commission is reassessing its probes into tech companies such as Meta, Apple, and Google, as the companies urge president Trump to intervene against the EU regulations which they termed as being overzealous, the Financial Times reported.
The reviews could reduce or change the range of probes and will cover cases launched since March 2024 under the Digital Markets Act (DMA).
All decisions and potential fines will be posed during the review period while technical work on the cases will continue.
Meta’s EU DMA cases that will be under review includes investigations into its “pay or consent” model.
The European Commission’s new chief competition enforcer, Teresa Ribera has denied The Financial Times report that said the agency is reassessing its probes into the likes of Meta.
I=6 The EU Commission is expected to impose lighter fines on Meta Platforms for breaching DMA
The EU Commission is expected to impose light fines on Meta Platforms and Apple for breaching the digital markets act (DMA), Reuters reported citing people familiar with the matter.
The sources cited the geopolitical climate as one of the reasons for the change in stance by the EU Commission.
The EU Commission’s preliminary findings indicated that Meta’s Pay or Consent model breaches the DMA, the findings were going to be confirmed by March 2025 and could be as high as 10% of the company’s annual global turnover.