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An investigation by the European Commission is putting Facebook and Instagram in hot water. The EU has informed Meta, the parent company of the social media platforms, that their personalized advertising model, known as “pay or consent,” violates the Digital Markets Act. This move comes as the EU aims to ensure competition in markets where companies like Meta have been amassing personal data from millions of citizens.
Meta’s “pay or consent” model has been under scrutiny, as the company argues that offering a paid subscription on Facebook and Instagram provides an ad-free experience for users who opt not to subscribe. However, the EU’s preliminary findings suggest that this model does not comply with the DMA rules, as gatekeeper companies must obtain explicit consent from users before sharing their data between different platforms for advertising purposes.
If Meta is found to be in non-compliance with the DMA, the Commission could impose a hefty fine of up to 10 percent of the company’s total worldwide turnover. The ball is now in Meta’s court to respond to the findings and potentially face further consequences if they fail to comply with the EU’s regulations.
It remains to be seen how Meta will address the EU’s concerns and whether they will adjust their advertising model to align with the Digital Markets Act. Failure to do so could result in even more severe penalties, including possible restrictions on acquisitions or divestments of parts of the business. The future of Facebook and Instagram in the EU hangs in the balance as the investigation unfolds.
