EU consumer watchdogs question legality of Meta's subscription model
European consumer protection authorities are currently examining whether Meta has violated EU consumer law in introducing its paid subscription model. The company has been informed of the authorities’ concerns, the EU commission announced on Monday. Meta now has until September to respond.
At issue is the paid subscription model that Meta introduced in the EU last year. According to Meta, the new model allows users to use Facebook and Instagram without ads – if they pay a monthly fee. Meanwhile their activity on the platforms continues to be tracked, even if they choose the paid subscription option.
National consumer protection authorities in the EU have now examined several elements of the paid subscription model – and found that they could constitute “misleading or aggressive practices.” Part of the authorities’ investigation is to assess “whether Meta provided consumers upfront with true, clear and sufficient information.” Consumers could potentially have been subjected to “undue pressure to choose rapidly between the two models,” paid and unpaid. It is questionable whether, based on the information presented to them, consumers were in a position to understand the impact their decision might have on their rights.
Violation of EU consumer law?
Authorities are concerned that Meta’s paid subscription model could violate EU guidelines against “unfair commercial practices” and “unfair contract terms.”
A press release issued by the European Commission outlines the authorities’ concerns, one of which is the use of the word “free.” This could be seen as misleading to consumers. Those who decide not to pay the monthly subscription fee must accept that their data will be used to target them with personalized ads – which Meta uses to generate revenue.
The authorities also see Meta as potentially “confusing users” in violation of EU law. In order to find out how their data is used, users have to navigate through several windows and links.
Consumer protection authorities criticize the vague language used by Meta, for instance its use of “your info” to refer to users’ “personal data.” The company also suggests that paying customers will not see any ads at all, which is not the case, since “they might still see ads when engaging with content shared via Facebook or Instagram by other members of the platform.”
Finally, Meta potentially pressured consumers to quickly choose between the models – without giving them sufficient time to assess the implications of their choice. Users for whom Facebook and Instagram “often constitute a significant part of their social lives and interactions” were unable to access their accounts before making a choice.
Meta must respond
These concerns were relayed to Meta in a letter from the Consumer Protection Cooperation (CPC) Network, which brings together the authorities responsible for enforcing EU consumer law.
The company now has until September 1 to respond to the CPC network’s letter and propose solutions. If Meta fails to address the concerns, CPC authorities can take “enforcement measures, including sanctions.”
The CPC network began looking into Meta’s “pay or consent” model after the European Consumer Organization (BEUC), a group of consumer organizations, filed a complaint against the company. The group welcomes the CPC network’s actions.
Agustín Reyna, Director General of the BEUC, now urges Meta “to change its pay-or-consent choice screen” and provide consumers “with a fair and freely-given choice.”
Further investigations
The investigation by European consumer protection authorities is coordinated by the European Commission and led by the French Directorate General for Competition, Consumer Affairs and Fraud Prevention.
In a different proceeding earlier this month the European Commission informed Meta of its preliminary findings that the company’s paid subscription model violates the EU’s Digital Markets Act. In this case as well Meta has the opportunity to respond. If the preliminary findings are confirmed, the commission can assess a monetary fine equalling up to 10 percent of the company’s total global revenue. Repeat infractions can lead to even higher penalties.
The Irish consumer protection authority is also currently assessing the permissibility of the subscription model within the framework of the General Data Protection Regulation (GDPR).
Meanwhile in May a consumer protection group in the German state of North Rhine-Westphalia filed an injunction against Meta. The group alleges that users cannot make a choice on a voluntary basis – a central violation of the GDPR. What’s more, the options are presented in such a way that users are encouraged to agree to free use and thus consent to Meta’s comprehensive user tracking for the purpose of displaying personalized ads.
In January of this year Alexander Roßnagel, the data protection commissioner for the German state of Hesse, called the subscription model false advertising. The company failed to meet legal requirements, Roßnagel said. He also criticized Meta for continuing to collect comprehensive data on users even if they pay subscription fees. (dpa / js)