Meta’s long journey to find a means of circumventing user consent is still not over, as its current “ad-free service” is now being challenged by the European Consumer Organisation (BEUC) which alleges failure to fully comply with EU regulations.
Specifically, changes that Meta made to satisfy prior directives by EU regulators may not actually stand up to the requirements set forth by the GDPR and the Digital Markets Act. Among other things, the group alleges that Meta downgrades its level of service for those that take the “third option” instead of subjecting themselves to personalized advertising.
Meta may not yet be in the clear with ad-free service
Meta’s ad-free service model emerged after years of attempting to sidestep obtaining clear user consent by applying almost every possible exception provided for in the GDPR. The model appeared to be on track to be legitimized when regulators centered the debate on price point and availability of a less personalized ad-supported “third option,” both of which Meta addressed this past November.
The company reduced its asking price for the ad-free service by 40% and implemented what was billed as a more context-dependent advertising model as its “third option” for a free-to-use version of its services. That model is supposed to base the ads it displays primarily on what the user is currently looking at during a Facebook or Instagram session, supported only by a “minimal” set of data points such as age, location and gender. However, this was with the caveat that video ads would be unskippable for at least several seconds with this setting.
The consumer advocates frame this new variant of the ad-free service as a downgrade. That could be a problem for Meta, as EU regulations stipulate that users should not be coerced into accepting personalized advertising. Meta’s official position is that it has gone beyond what is required by EU law. BEUC described the changes made as “cosmetic” and as continuing to push users toward the behavioral ads option.
In addition to accusations of degrading the ad-free service, BEUC says that Meta is not minimizing the data it collects from “third option” users and that its unclear terms are meant to steer users toward accepting personalized ads.
Battle to avoid EU regulations on consent stretches into eighth year
Just about all of the big names in tech have now faced issues with EU regulations, but Meta has been unique in its insistence in not being subject to GDPR user consent requirements. The company spent 2018 to 2024 gradually going through each of the exceptions to the consent requirement that might possibly apply to their business model. The two biggest battles involved its attempts to apply the “contractual necessity” and “legitimate business interest” exceptions, both of which were eventually shot down by regulatory bodies.
The ‘consent or pay’ model was introduced in November 2023, and immediately prompted complaints from privacy advocates and red flags from regulators. Initially determined to be illegal by the European Commission in July 2024 in a preliminary ruling, the door was left open for the model to be tweaked into legal acceptability by an August EDPB opinion that stated that offering a reasonable ad-free service alternative that was free to users and tweaking the paid subscription price to align with what platforms make from targeted ads could achieve compliance with DMA terms and other EU regulations.
The BEUC complaint seems to return to the European Commission’s original July ruling. At that time the body agreed with Consumer Protection Cooperation (CPC) Network authorities in asserting that the sign-up process for the paid ad-free service was confusing (forcing users to navigate through several Facebook or Instagram pages) and was misleading in describing the alternative as “free” without sufficiently expanding on how the company makes money from personalized ads. The Commission also noted that the development was coercive as Facebook and Instagram users had built social and business lives on the platforms for years while they were offered as free services, and had not been given sufficient warning and time to make a decision given this investment. At that time Meta was given until September 2024 to revise the system to comply with EU regulations.
Meta is also thus far essentially alone in trying to get the ‘consent or pay’ model over all the legal hurdles in the bloc, though other companies are likely waiting to see if it can clear EU regulations before introducing their own similar ad-free service options. Prior complaints against Meta’s model by activist group noyb raised the possibility of every digital service introducing a similar pay-for-privacy model, which they estimated would cost users about €1,500 per year for access to a range of commonly used services.
