This is in addition to the possibility of a violation of the Digital Markets Act.
In all honesty, the European Commission is not pleased with a business model known as Meta. This model provides users in the European Union, the European Economic Area, and Switzerland with the option to continue using Facebook and Instagram with targeted advertisements without incurring any costs, or they can sign up for a monthly subscription that is supposedly supposed to provide an experience that is free of advertisements.
The “pay or consent” strategy may be in violation of consumer legislation, according to officials from the Consumer Protection Cooperation (CPC) Network, which is a consortium of national authorities that implement EU consumer protection regulations. These officials have also suggested that Meta may be in violation of consumer legislation. The Commission, which is the executive branch of the European Union, was responsible for coordinating the action that the group took against Meta.
In a letter that it submitted to Meta, the CPC Network detailed a number of different ways in which it believes the company may be in violation of rules governing consumers. The deadline for the corporation to respond and offer potential answers to the issues raised by the inspectors is September 1st. In the event that officials from the CPC discover that Meta does not take the necessary actions to address the issues, they may decide to conduct enforcement actions against the firm, which may include the institution of fines.
CPC authorities have suggested that Meta is misleading people by portraying its platforms as free to use if they choose not to pay for a membership. However, Meta really monetizes its users’ personal data by displaying targeted advertisements, which suggests that Meta is actually deceiving its users. Moreover, they assert that Meta is “confusing users” by asking them to read various sections of the privacy policy and terms of service in order to gain insight into the manner in which their data is being utilized for the purpose of displaying tailored advertisements.
The officials have also taken issue with the “imprecise terms and language” used by Meta, which gives the impression that users will not be exposed to advertisements at all. However, it is possible that advertisements may still be presented “when engaging with content shared via Facebook or Instagram by other members of the platform.” In addition, they assert that Meta is exerting pressure on users who have been using Facebook and Instagram for a considerable amount of time without making any payments “to make an immediate choice, without giving them a pre-warning, sufficient time, and a real opportunity to assess how that choice might affect their contractual relationship with Meta, by not letting them access their accounts before making their choice.”
The year before last, Meta made an effort to comply with the data privacy requirements of the European Union (EU) while still keeping its advertising strategy by introducing its “pay or consent” preferences. “many consumers might have been exposed to undue pressure to choose rapidly” between consenting to data collection or paying a monthly charge, “fearing that they would instantly lose access to their accounts and their network of contacts,” according to officials from the CPC. This is a source of concern for the CPC authorities.
The European Union is conducting other investigations against Meta on the “pay or consent” model; this action is distinct from those investigations. At the beginning of this month, the European Union (EU) stated that Meta had perhaps violated the Digital Markets Act by taking this strategy. A fine of up to ten percent of Meta’s yearly revenue around the world might be imposed on the company if it is found guilty of the charges.
In addition, the Commission made a request for additional information from the corporation in March regarding the “pay or consent” approach that is outlined in the Digital Services Act. This is yet another rule that the legislature enacted with the intention of limiting the influence of major technology companies. In addition to this, consumer rights organizations have sent in objections, saying that the strategy is in violation of the General Data Protection Regulation of the European Union.