Janice R. Andrews
Meta’s latest business model has raised serious concerns from the European Commission. It gives users in the EU, Eurasian Economic Area, and Switzerland two options: either pay a monthly subscription to use Facebook and Instagram ad-free, or continue using the platforms for free with targeted ads. The goal of this arrangement, which Meta unveiled a year ago, is to maintain advertising revenue while adhering to EU data protection regulations. It has, nevertheless, drawn attention from a number of regulatory organizations.
The “pay or consent” strategy used by Meta may be in violation of consumer rules, according to representatives of the Consumer Protection Cooperation (CPC) Network, a collaboration of national authorities tasked with upholding EU consumer protection laws. The CPC Network’s operations against Meta have been coordinated by the European Commission, the EU’s executive branch, which has identified several possible security violations.
Concerns of CPC Network
The CPC Network listed multiple potential consumer law violations that Meta may be violating in a written letter. Meta has been given until September 1st, 2023, to address these concerns and provide answers. If these problems are not sufficiently resolved, the business may face enforcement actions and perhaps penalties.
The main worry of the CPC Network is that Meta might be deceiving consumers into thinking that its platforms are free if they decide not to pay for a subscription. In actuality, Meta makes money by showing customized advertisements on user data. Moreover, the authorities contend that Meta is confusing customers by making them read through various terms of service and privacy policy sections in order to comprehend how their data is used for customized advertisements.
Pressuring and Deceiving Users
Authorities have also taken issue with Meta’s use of “imprecise terms and language” that imply subscribers won’t see any advertisements, despite the possibility that they may still display while interacting with user-shared material. Furthermore, they contend that Meta is forcing loyal customers into making a decision right now without giving them enough time or a clear explanation of how their choice can impact their contractual relationship with Meta.
The CPC Network is especially worried about users having to choose between paying a monthly charge or agreeing to data collecting fast. If they don’t make a speedy decision, they can lose access to their accounts and contacts. Many customers may feel unjustly pressured to make a decision without fully comprehending the ramifications as a result of this pressure.
More Comprehensive Regulations
This examination is distinct from other inquiries the EU is carrying out against Meta in relation to the “pay or consent” model. The EU said earlier this month that Meta may have used this strategy in violation of the Digital Markets Act (DMA). If proven guilty, Meta can be fined up to 10% of its yearly revenue worldwide.
In addition, Meta was asked to provide more information in March by the European Commission over the “pay or consent” model in accordance with the Digital Services Act (DSA), a further law intended to limit the influence of large technology corporations. Additionally, consumer rights organizations have filed objections, claiming that Meta’s methodology is in violation of the General Data Protection Regulation (GDPR) of the EU.
Consequences for Meta
Significant legal obstacles are being presented to Meta’s business strategy from several angles. The results of these inquiries and the business’s answer to the letter from CPC Network may have a significant impact on its operations within the European Union and may establish a standard for how internet companies handle data privacy and consumer protection regulations in the area. With the deadline drawing near, all eyes will be on Meta’s answer and the CPC Network and European Commission’s next moves.
