EU Commission ready to hit Meta. ‘Pay or agree’ model violates DMA

Brussels – After the investigations opened in recent months by the European Commission against Meta for potential and multiple violations of the Digital Services Act (DSA), this time, it is the turn of the Digital Markets Act (DMA), the law on digital markets that entered into force March 6. The EU executive today (July 1) informed the provider of Facebook and Instagram lf the preliminary findings over the on the pay or consent advertising model, calling it “non-compliant” with the Digital Markets Act: “this binary choice forces users to consent to the combination of their personal data and fails to provide them a less personalized but equivalent version of Meta’s social networks,” it said.

The EU Commission noted that Online platforms often collect personal data across their own and third-party services to provide online advertising services. Due to their significant position in digital markets, “gatekeepers have been able to impose terms of services on their large user base, allowing them to collect vast amounts of personal data.”  Since the potential advantages over competitors (who do not have access to such a vast amount of data) have raised “high barriers” to the provision of online advertising and social networking services, the DMA stipulates that all gatekeepers must seek users’ consent to combine their personal data between core designated platform services and other services. If a user refuses to give consent, they must have access to a “less personalized but equivalent” alternative.

Since the introduction of the ‘pay or agree’ offer in November 2023, Meta has been under scrutiny by the Commission, with the investigation officially starting on March 25. This is because Facebook and Instagram users in the 27 EU member countries have to choose between a monthly fee subscription for an ad-free version of the social network or free access to a version with personalized ads. According to preliminary findings, the Commission does not consider this model to be compliant with the Digital Markets Act since it does not allow users to “opt for a service that uses less of their personal data but is otherwise equivalent,” or even to “exercise their right to freely consent to the combination of their personal data.” In other words, to ensure compliance with EU law, “users who do not consent should still have access to an equivalent service that uses less of their personal data.”

Meta will then have a chance to defend itself by reviewing the documents in the EU Commission’s file and responding in writing before the conclusion of the investigation on March 25, 2025. Should the preliminary findings be confirmed, the EU executive will adopt a non-compliance decision, imposing a fine of up to 10 percent of the company’s worldwide turnover, raised to 20 percent in the case of repeated violations.