Meta's ad-free subscription service in Europe is facing scrutiny from the Consumer Protection Cooperation Network (CPC). The CPC has issued a notice to Meta, claiming that the marketing of this service is misleading. Meta introduced this subscription in November, allowing EU users to pay a monthly fee to opt out of ads and data tracking, in compliance with new EU regulations. However, privacy advocates argue that Meta is charging for a service that should be free, as EU regulations require clear user control over data usage.

Key Issues

• Violation of Digital Markets Act (DMA): The EU Commission ruled that Meta’s plan violates the DMA and has given Meta a chance to respond before facing potential fines.
• Misleading Marketing: The CPC's investigation found that Meta’s ad-free package lacks clarity and pressures users to make quick decisions, fearing loss of access to their accounts.
• Confusing Documentation: Meta's documentation is confusing, and users are pressured to choose between paying or accepting data processing without sufficient information.
• Essential Utility Argument: Facebook and Instagram are seen as essential utilities, complicating the legal argument against Meta charging for its services.

CPC's Findings

• Misleading Terms: Meta uses the word ‘free’ misleadingly, requiring users who do not want to subscribe to accept personalized ads.
• Confusing Navigation: Users must navigate through different screens and hyperlinks to understand how their data will be used.
• Imprecise Language: Terms like ‘your info’ are used instead of ‘personal data,’ and users might still see ads even if they pay.
• Pressure Tactics: Users are pressured to make immediate choices without sufficient time or information, fearing loss of account access.

Meta has until September 1, 2024, to respond to the CPC's notice and propose solutions. If Meta does not address the concerns, CPC authorities may take enforcement measures, including sanctions.

Background

• CPC Network: A network of authorities responsible for enforcing EU consumer protection laws, coordinated by the European Commission.
• BEUC Alert: On November 30, 2023, the European Consumer Organisation (BEUC) alerted the CPC network about potentially misleading practices in Meta's new subscription model.
• Relevant Laws: Articles 5-9 of the Directive concerning unfair business-to-consumer commercial practices and Article 3 of the Directive on unfair terms in consumer contracts.

Ongoing Investigations

• Digital Services Act (DSA): On March 1, 2024, the Commission formally requested more information from Meta regarding the Subscription for no Ads options.
• DMA Compliance: On March 25, 2024, the Commission opened proceedings to investigate whether Meta’s ‘pay or consent’ model complies with Article 5(2) of the DMA. Preliminary findings on July 1, 2024, indicated non-compliance.

Meta is working with EU authorities and has offered to halve the price of its ad-free package to appease regulators. The outcome of this case could set a legal precedent affecting the DMA.