European Union currently has some of the most stringent rules targeted at “Big Tech” corporations including Apple, Microsoft, Meta, Amazon, Alphabet (Google) and many others under the Digital Markets Act (DMA) legislation. Recently, Meta has become the latest company deemed non-compliant by the region due to its business model surrounding ad-free versions of Instagram and Facebook.
Europe Targets Meta
DMA was enforced since 2023 and it has since became the landmark legislation that may have just the power to counteract anti-consumer policies from designated corporations, dubbed “gatekeepers”. A “gatekeeper” is a company that operates any platform or service covering a majority of the market within EU jurisdictions, which may be deemed essential to the operation of businesses and consumers.
These companies will receive extra scrutiny from any potential “anti-steering” policies that may prevent market competition. Additionally, gatekeepers are required to gain explicit consent from users for data collection – should the user refuse, they should be able to use the equivalent service without the personalization features (which can include algorithm-driven feeds, targeted ads, and more). According to European Commission (EC), this is where Meta is potentially running afoul of DMA laws.
Back in November 2023, users in European Union were given a choice of using the app as usual but will be subjected to data collection and ad tracking, or pay a monthly subscription of up to 12.99 EUR per month for the ad-free experience. Here’s what the Commission wrote in the press release:
The Commission takes the preliminary view that Meta’s “pay or consent” advertising model is not compliant with the DMA as it does not meet the necessary requirements set out under Article 5(2). In particular, Meta’s model:
- Does not allow users to opt for a service that uses less of their personal data but is otherwise equivalent to the “personalised ads” based service.
- Does not allow users to exercise their right to freely consent to the combination of their personal data.
Essentially, EC thinks Meta is withholding users with the option to use its service without being tracked extensively, and it believes that “users who do not consent should still get access to an equivalent service which uses less of their personal data, in this case for the personalization of advertising.”
The ball is on Meta to make its defense against EC’s preliminary reports, with investigation set to complete by March 2025; however, should EC confirm that Meta is noncompliant, the company may face severe fines which amounts up to 10% of global revenue. Repeated offenses may raise the figure up to 20%, and in special cases, the governing body has the power to force Meta to sell parts of its businesses in the case of “systemic non-compliance”.
Source: Android Authority
Pokdepinion: Good to see DMA having the power to keep Big Tech in check.
