Consumer authorities and EU Commission raise concerns about Meta’s ‘pay or OK’ model

4 months ago 13

Tensions between Meta and the EU intensified on Monday (22 July), with the European Commission and European consumer authorities saying the US tech giant may be breaching consumer protection law with its “pay or OK” model, according to a Commission press release.

This is the latest in a series of actions by the EU executive targeting the Facebook and WhatsApp owner and in particular its “pay or OK” model.

Meta, for its part, has moved to pull two artificial intelligence (AI) products from the EU market, citing regulatory uncertainty.

Coordinated by the Commission, the Consumer Protection Cooperation (CPC) Network, which connects member states’ consumer authorities, sent a letter to Meta on Monday (22 July), identifying a series of what they deem are misleading and unfair practices, the press release said.

Meta has to reply by 1 September. After that point, CPC authorities can decide on sanctions.

Under the model, launched in November 2023, users can opt out of personalised ads on Meta platforms in exchange for a fee.

Already in its preliminary findings on 1 July, the Commission said Meta’s “pay or OK” model is in breach of the EU’s landmark competition law, the Digital Markets Act (DMA).

The CPC is concerned that Meta did not follow EU consumer protection law when rolling out the “pay or OK” model on Facebook and Instagram.

The concerns include claims that Meta misled users by labelling the service as “free” while requiring data consent from those who do not pay, created confusion with unclear navigation and terminology about data usage, and pressured users to make a swift decision without adequate time to understand the implications.

Using subscriptions instead of ads is common in many industries and “follows the direction” of the Court of Justice of the EU, a Meta spokesperson told Euractiv in response to the announcement of the letter.

The Court of Justice in the EU ruled about a year ago that a company can decide to charge a fee for users looking for a service without data processing.

However, Commission officials said earlier in July that this does not negate the DMA’s requirement to offer a service that utilises less personal data on an equivalent basis to the personalised ads service.

Meta rolls back

Last week, the company said it would not release its latest multimodal model in the EU, citing “the unpredictable nature of the European regulatory environment,” a spokesperson told Euractiv. The news was first reported by Axios.

The new Llama multimodal model is able to learn from different content, such as images, videos, and texts.

The Meta spokesperson said the EU is taking longer than its counterparts to clarify how it will apply its regulations, particularly the General Data Protection Regulation (GDPR). This includes the UK, which has a very similar framework to the EU’s GDPR, the spokesperson told Euractiv.

In June, the company halted the launch of Meta AI, which would have trained AI with users’ posts, after a request from the Irish Data Protection Commission, which came on the heels of similar requests by other data protection authorities.

Digital rights organisation Noyb had previously filed complaints on Meta AI in 11 EU member states.

Apple similarly halted the launch of its Apple Intelligence services in Europe on 26 June, citing “regulatory uncertainties” due to the DMA.

[Edited by Eliza Gkritsi/Zoran Radosavljevic]