European regulators don’t strike me as being particularly fond of Meta. Google, Apple, Amazon, et al seem only marginally more popular, if at all.
In June we wrote about how Meta was pausing its effort to use user-generated Facebook and Instagram content to train Meta AI after a wave of objections led by Irish privacy regulators.
This week we learned that EU regulators are telling Meta that its subscription-based ad-free experience is now verboten.
According to the New York Times (paywall warning), the EU has ruled that Meta’s European subscription-based ad-free Facebook and Meta service is an illegal “pay or consent” scheme.
Meta rolled out the service in Europe last year. The subscriptions cost up to 12.99 euros per month.
A ‘Pay or What’ Scheme?
Ok, what is a “pay or consent” scheme? And why do European regulators think they are bad?
The objection is based on privacy grounds. According to the Times, EU regulators believe the scheme requires users to choose between paying to be spared a barrage of ads. Or surrender more personal data that Meta can use to make gobs of money serving targeted advertising.
One view of all this is that poor old Meta just can’t win. At least not in Europe. Meta initially rolled out the subscription product as a way to placate regulators vexed by Meta’s data-hungry ad-based business model.
Not so fast Meta. The EU wants you to give European consumers their privacy. And they claim the subscription plan was just a way to force them to pay for it.
This action is in line with an apparent pattern of European actions designed to reign in U.S.-based big tech companies. Most of these actions have seemed designed to protect consumers. Others have been aimed at protecting European businesses trying to compete with big tech.
For example, in March we reported on “Big Tech’s Regulatory Reckoning” in which the EU targeted Google, Apple, and Meta in its first enforcement effort for the European Digital Marketing Act. Much of that action seemed aimed at helping EU-based companies compete against the behemoths.
Get the Gatekeepers
As we noted in March, the DMA has designated six companies as “gatekeepers” which singles them out for scrutiny. The six are Alphabet, Amazon, Apple, Meta, Microsoft, and ByteDance, the Chinese company that owns TikTok.
One element of the DMA’s regulatory focus on the three companies involves “anti-steering” behavior. This means taking measures to prevent app developers from steering in-app purchases to their own websites. They do this to avoid paying a tribute to Apple or Google.
Apple was a focus of the anti-steering accusations.
Another DMA red flag is “self-preferencing” where a platform “preferences” its products over those of third-party merchants.
An example of this, which we cited in March (sourced to Time), is “whether Google prioritizes its own services – such as Google Hotels or Google Flights – when users type queries into its search engine, potentially limiting business for rivals such as Booking.com or Skyscanner.”
Back to the latest action targeting Meta, European regulators say the “pay or consent” scheme is also a violation of the DMA. Meta has fired back (via Meta President Nick Clegg, a former UK politician), saying that European “overregulation” is causing economic harm.
