(BRUSSELS) – An online service is not ‘free’ if it earns revenue from using personal data to show personalised ads, the EU made clear Monday over concerns that Meta’s ‘pay or consent’ model breaches EU consumer law.
The Consumer Protection Cooperation (CPC) Network sent a letter following the concerns over Meta’s ‘pay or consent’ model, iin action coordinated by the Commission and led by the French Directorate General for Competition, Consumer Affairs and Fraud Prevention.
The action started in 2023, immediately after Meta requested consumers overnight to either subscribe to use Facebook and Instagram against a fee or to consent to Meta’s use of their personal data to be shown personalised ads, allowing Meta to make revenue out of it (‘pay or consent’).
Consumer protection authorities assessed several elements that could constitute misleading or aggressive practices, in particular whether Meta provided consumers upfront with true, clear and sufficient information. They analysed whether this information allowed consumers to understand the implications of their decision to pay or to accept the processing of their personal data for commercial purposes on their rights as consumers. Many consumers may also have been exposed to undue pressure to choose rapidly between the two models, fearing that they would instantly lose access to their accounts and contacts.
The latest action focuses specifically on the assessment of Meta’s practices under EU consumer law and is distinct from ongoing investigations against the company on its ‘pay or consent’ model potentially breaching the EU’s Digital Markets Act (DMA).
Several practices in the context of Meta’s roll-out of its new business model raised concern and could potentially be considered unfair and contrary to the Unfair Commercial Practices Directive (UCPD) and the Unfair Contract Terms Directive (UCTD):
- Misleading consumers by using the word ‘free’ while, for users who do not want to subscribe against a fee, Meta requires them to accept that Meta can make revenue from using their personal data to show them personalised ads;
- Confusing users by requiring them to navigate through different screens in the Facebook/Instagram app or web-version and to click on hyperlinks directing them to different parts of the Terms of Service or Privacy Policy to find out how their preferences, personal data, and user-generated data will be used by Meta to show them personalised ads;
- Using imprecise terms and language, such as ‘your info’ to refer to consumers’ ‘personal data’ or suggesting that consumers who decide to pay will not see ads at all, while they might still see ads when engaging with content shared via Facebook or Instagram by other members of the platform;
- Pressurising consumers who have always used Facebook/Instagram free of charge until the new business model was introduced, and for whom Facebook/Instagram often constitute a significant part of their social lives and interactions to make an immediate choice, without giving them a pre-warning, sufficient time, and a real opportunity to assess how that choice might affect their contractual relationship with Meta, by not letting them access their accounts before making their choice.
Meta now has until 1 September to reply to the letter and propose solutions. If Meta does not take the necessary steps to solve the concerns raised, CPC authorities can decide to take enforcement measures, including sanctions.
Social media and search engines – European Commission
More information on the consumer enforcement actions
