Meta new subscription model targeted by the EU: breach of DMA?

Meta, the company behind Facebook and Instagram, is once again at the center of attention. This time it is about a new subscription model that, according to the EU Commission, violates the European Union’s Digital Markets Act (DMA).

Brief summary:

• Meta offers a new subscription model in which users can choose between paid use without advertising and free use with personalized advertising.
• The EU Commission considers this model to be in breach of the DMA as it forces users to choose between data protection and free use.
• An investigation has been launched to examine the legality of the model.
• Possible consequences for Meta range from fines to the adjustment of the business model.

New subscription model from Meta

Meta recently introduced a new subscription model that offers Facebook and Instagram users two options: free use with personalized advertising or a paid, ad-free version. This model is intended to offer users more choice and at the same time secure Meta’s revenue.

However, this introduction quickly attracted the attention of the EU Commission. The Digital Markets Act, which came into force last year, aims to limit the power of large technology companies and promote competition in the digital market. A central element of the DMA is the protection of user rights, particularly with regard to data protection and fair business practices.

Why the subscription model is controversial

The EU Commission argues that Meta’s new model violates the DMA. The main point of criticism: users are forced to choose between their privacy and the cost of using the services. This contradicts the basic idea of the DMA, which is intended to guarantee users both data protection and access to digital services at no additional cost.

Another concern is that Meta is exploiting its market power to force users’ consent to personalized advertising. The EU Commission has therefore launched an investigation to determine whether the model violates the provisions of the DMA. If this is the case, Meta could be forced to adapt the model or even abolish it altogether.

Possible consequences and future developments

If the EU Commission comes to the conclusion that Meta’s subscription model does indeed violate the DMA, the company could face significant consequences. These range from high fines to necessary adjustments to the business model in order to meet the requirements of the DMA.

For Facebook and Instagram users, this could mean that they continue to have free access to the platforms without having to sacrifice their privacy. Companies such as Meta could be forced to develop alternative business models that meet both the legal requirements and the needs of users.

Conclusion

Meta’s new subscription model faces an uncertain future. The EU Commission’s investigation will show whether the model actually violates the Digital Markets Act. In the meantime, it remains to be seen how Meta will respond to the allegations and what adjustments may need to be made. The outcome of this investigation could be groundbreaking for future business models of large technology companies and redefine the handling of user data and data protection in the digital age.