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Meta announced this advertising model last year, but it is facing multiple investigations and fresh claims that it misleading consumers.
Meta’s ‘pay or consent’ business model is facing a new threat in the EU, as the Consumer Protection Cooperation (CPC) Network has concerns that it might breach EU law.
The CPC Network sent a letter to Meta that lists several ways this advertising model might be considered unfair and contrary to EU consumer laws. Meta has until 1 September to respond to the letter and propose ways to solve these concerns. If they are not satisfied, CPC authorities could take enforcement actions, including sanctions.
Meta revealed this advertising model last year as a way to balance out its advertising practices with the EU’s various data protection laws. This model means EU users of Meta apps Instagram and Facebook can choose between using the apps for free with personalised ads enabled or sign up to a monthly subscription for an uninterrupted and privacy-friendly experience.
But since it was first revealed, the model has been criticised as a ‘pay or consent’ smokescreen that aims to justify a massive collection of data, a practice that complainants have said is illegal under GDPR.
The CPC Network – which includes various authorities that enforce EU consumer protection laws – investigated the proposed model and is concerned that it could mislead consumers by using the word ‘free’, since those who do not pay a subscription fee will still be providing data for Meta to make revenue from.
The CPC complaint also claims Meta is confusing users by having them navigate through various screens to learn more about how their preferences, personal data and user-generated data will be used by Meta.
The letter also shares concerns that Meta uses imprecise terms and language when explaining details to consumers and that the company is pressurising consumers who have always used these apps free of charge to make an “immediate choice” on subscribing or not, without adequate time to assess how their contract with Meta will be impacted.
The action by the CPC Network – coordinated by the European Commission – is the latest action against this advertising model. It is separate from an EU investigation that recently found that Meta’s pay or consent model is breaching the Digital Markets Act.
Meanwhile, the EU has also requested more information on this advertising model under the Digital Services Act. This pay or consent model is also being investigated by the Irish Data Protection Commission to see if it complies with GDPR.
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