EU Pressures Meta to Revise “Pay or Consent” Model or Face Sanctions

European consumer authorities have issued a stern warning to Meta, the parent company of Facebook, regarding its controversial “pay or consent” model, which was launched late last year. Under this model, users are faced with a choice: pay a fee to avoid data collection or consent to share their personal data to continue using Facebook and Instagram for free.

The model has drawn significant criticism from European consumer groups, leading to formal complaints from organizations in France and Spain. These groups argue that the new system could be deemed unfair and misleading, raising concerns about whether Meta has adequately informed users about the implications of their choices. In response to these concerns, national consumer protection authorities in Europe have sent a letter to Meta, demanding a resolution by September 1. The letter outlines that if Meta fails to address these issues, it may face enforcement measures, including potential sanctions.

The European Commission, which coordinated the action with the Consumer Protection Cooperation (CPC) network, has emphasized that failure to comply could result in substantial fines for Meta. The company’s “pay or consent” model has already faced scrutiny for allegedly violating EU competition rules by presenting users with a “binary choice” that could be seen as coercive. Meta has defended its model, asserting that it complies with European regulations and aligns with established business practices in various industries. The company argues that offering a subscription alternative to advertising adheres to legal standards set by Europe’s highest court.

Agustin Reyna, director general of the European Consumer Organisation, has supported the move against Meta, urging the company to amend its pay-or-consent system to ensure consumers are presented with a genuinely fair choice. This ongoing dispute reflects broader tensions between Meta and EU regulators over data privacy and competition issues. Last week, Meta announced it would delay the release of its advanced generative AI models in Europe due to what it described as unpredictable EU regulations. Additionally, the company postponed the launch of its Twitter alternative, Threads, in the EU last year.