Meta Accused by EU of Misleading Consumers with “Free” Claims and Privacy Fees

The European Union (EU) has accused Meta, the parent company of Facebook and Instagram, of deceptive practices by promoting their social media platforms as “free” while pressuring users to either pay a subscription fee for an ad-free experience or allow the company to process their personal data and serve them personalized ads. The EU’s Consumer Protection Cooperation (CPC) network, responsible for enforcing consumer protection laws in the EU, sent a letter to Meta on July 22, ordering them to modify their “pay or consent” model.

Vera Jourova, Vice President for Values and Transparency at the European Commission, stated, “We will not stand by and watch some sneaky practices that misdeal consumers.” The CPC identified several objectionable practices in Meta’s subscription-for-no-ads business model in Europe. One concern is the use of the word “free” while requiring users who don’t want to pay a subscription fee to allow Meta to monetize their personal data through personalized ads. Another issue is the complexity in navigating through screens and hyperlinks to understand how Meta intends to use consumer-generated data for personalized marketing.

The CPC also accused Meta of using pressure tactics to push customers into opting for data processing or paying subscription fees. Additionally, Meta allegedly uses imprecise language like “your info” to disguise references to “personal data.” Meta has until September 1 to respond to the letter and propose solutions; failure to do so could lead to enforcement actions and sanctions.

Didier Reynders, Commissioner for Justice at the European Commission, emphasized that consumers should not be deceived into believing that they can either pay and avoid ads or receive a free service while Meta profits from their personal data. This action taken by the CPC is separate from an earlier decision by the European Commission in July, where they preliminarily determined that Meta’s pay or consent advertising model fails to comply with Article 5(2) of the Digital Markets Act (DMA).

Article 5(2) of the DMA requires gatekeepers like Meta to obtain user consent when combining personal data between core platform services and other services. If the commission’s investigation, set to conclude in March 2025, confirms the preliminary finding of non-compliance with Article 5(4) of the DMA, fines of up to 10 percent of Meta’s total worldwide turnover can be imposed. In cases of repeated infringement, Meta could face fines of up to 20 percent of turnover, divestiture of business units, or even a ban from operating in the EU.

Earlier this year, a coalition of 28 organizations urged Europe’s privacy enforcers to oppose Meta’s “pay or consent” model. In a joint letter, they argued that accepting this model would establish its use across various industries and undermine protections against surveillance capitalism. This highlights the broader concerns surrounding the impact of Meta’s practices on consumer privacy and the need for stricter regulations to safeguard user data.