Meta Platforms Regulatory Developments

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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.

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