The privacy group noyb has been hounding Meta in the EU since it was known only as Facebook, and the GDPR complaints continue with a new challenge to Meta’s “ad-free” subscription option.
Meta introduced the option in response to essentially striking out on its attempts to get an exception to GDPR user consent requirements. The platform now offers a monthly subscription service in the EU, which charges up to €251.88 per year for an ad-free version of its assorted properties (such as Instagram). The options for users are now to either pay Meta’s “privacy fee” or to continue with personalized ad tracking as usual, something noyb contends is still in violation of the GDPR.
New GDPR complaint tests “pay or okay” model
The GDPR establishes a narrow range of specific exceptions to collecting clear user consent for personalized advertising, and at this point Meta has tried to use every single one that is potentially applicable (and had them shot down by EU courts or regulators). Their final effort at GDPR circumvention was closed out in July of this year, when the CJEU ruled that Meta cannot claim “contractual necessity” as a basis for not obtaining user consent to ad tracking. Meta had also been attempting to claim “legitimate interest” as a basis for an exception, something that was also rejected.
After running through all of the GDPR exception possibilities, Meta settled on the “pay or okay” ad-free model as its latest gambit. About a month ago, it announced that Facebook users would now need to pay €9.99 per month for an ad-free experience on computers, or €12.99 to use the mobile app without tracking. Making additional accounts such as Instagram ad-free costs €8 for each. One can either pay these fees, agree to Meta’s tracking terms, or stop using their services.
The noyb GDPR complaint notes that consent thus cannot possibly be “freely given” as regulations require. It cites some further statistics in support of this point: industry studies that find only 3% of respondents are truly willing to be tracked but that 99% will opt in anyway if paying a fee is the only alternative, and that no more than 10% actually want their personal data to be used for targeted advertising.
noyb notes that the ultimate outcome of this GDPR complaint could set a precedent that makes online privacy very expensive. If Meta’s ad-free model is ultimately legitimized by regulators or courts, it is likely that all other apps supported by targeted advertising will adopt the same scheme. noyb calculates that at an average of 35 apps installed per phone, it would cost over €8,000 per year to pay a similar fee for all of them.
noyb is requesting that the Austrian data protection authority initiate an urgency procedure in response to its GDPR complaint, and to institute a fine against Meta to discourage it (and other companies) from proceeding with this ad-free strategy. The Irish Data Protection Authority would ultimately have to get involved, however, as host to Meta’s EU headquarters.
Ad-free approach could normalize paying for privacy
An interesting component of noyb’s GDPR complaint is that it spends more time criticizing the asking price rather than the basic legitimacy of the ad-free model under the regulation’s terms. Meta has countered by pointing out that its asking price is in line with other premium subscriptions, such as those of YouTube and Spotify; however, those services also offer additional features and benefits. noyb’s complaint notes that Meta’s estimated ad revenue is about €62.88 per user each year, making a paid subscription potentially over four times more profitable for them.
The ultimate compromise to settle the GDPR complaint could very well wind up being legal limits on what can be charged for an ad-free experience in the EU. The CJEU opened the door to this possibility with its July ruling, which said that a company might be legally justified in charging a “necessary” and “appropriate” amount for delivering the service without ads. It is far too early in the process for speculation about amounts, but going by noyb’s estimated Meta numbers that would likely be half or less what the company is presently asking.
TikTok may be the next to jump into the ad-free waters, as it has reportedly been testing a similar subscription version of its app in an “English-speaking market” outside the US that it will not specify. The asking price is reportedly $4.99 USD per month, already a substantial reduction from what Meta is asking for its services. Other apps that have proven to be data-hungry and that make substantial revenue from personalized advertising include LinkedIn, Reddit and Skype, all of which will likely be tracking the outcome of this GDPR complaint carefully.
