\n<\/p>\n
The European Union has given its strongest signal yet that a controversial tactic rolled out by Meta last November<\/a> to extract consent to tracking from regional users of Facebook and Instagram \u2014 by forcing them to choose between paying a monthly subscription or agree to tracking \u2014 won\u2019t wash under the bloc\u2019s updated digital governance and competition rules.<\/p>\n On Tuesday, digital EVP and competition chief Margrethe Vestager cast doubt on Meta\u2019s privacy fee, telling Reuters<\/a>: \u201cI think there are many different ways to monetize the services that you provide. Because one thing are the very targeted advertising that builds on data being consumed. Another way of showing your advertising is to make that contextual.\u00a0So I think it\u2019s important to continue the conversation with Meta and we will assess also finally, what is the next push in order for them to be compliant with the DMA [Digital Markets Act<\/a>].\u201d<\/p>\n In wider remarks to the news agency \u2014 discussing a new fee Apple announced in response to the DMA<\/a> \u2014 she also said: \u201cThere are things that we take a keen interest in, for instance, if the new Apple fee structure will de facto not make it in any way attractive to use the benefits of the DMA. That kind of thing is what we will be investigating.\u201d<\/p>\n The comments suggest the Commission is paying careful attention to any attempts by gatekeepers to use economic coercion as a tactic to circumvent the intended impact of the bloc\u2019s digital rules. Or, in other words, that tech giants are going to need to abide by both the letter and the spirit of the law.<\/p>\n The EU\u2019s goal for the DMA is to loosen Big Tech\u2019s grip on tipped digital markets and stamp out unfair tactics which flow from their ability to throw their weight around when it comes to imposing their own rules on other businesses and consumers.<\/p>\n Meta was designated a gatekeeper under the DMA last September,<\/a> with the EU listing several so-called \u201ccore platform services\u201d \u2014 including its ads business and aforementioned social networks \u2014 falling in scope of ex ante competition rules that include limitations on the use of people\u2019s data for ads. The Commission itself is responsible for enforcing this rulebook on gatekeepers.<\/p>\n Meta is also subject to the bloc\u2019s Digital Services Act<\/a> (DSA), an updated approach to online governance which includes a subset of extra rules<\/a> for so-called very large online platforms (VLOPs). Meta\u2019s social networks, Facebook and Instagram, are both designated. And the Commission oversees Meta\u2019s compliance with the DSA\u2019s rules for VLOPs, too.<\/p>\n Both the DSA and the DMA demand in-scope platforms obtain consent for ads processing. Whereas Meta stands accused \u2014 by privacy rights campaigners<\/a>, consumer protection organizations<\/a> and some EU lawmakers<\/a> \u2014 of using unfair tactics and economic coercion to force Europeans to hand over their data.<\/p>\n While the Commission didn\u2019t appear to take much note when Meta switched on its controversial paywall last fall, it has clocked the growing outrage by civil society groups and others. And, earlier this month<\/a>, the EU sent it a formal request for information (RFI) to Meta about this aspect of its DSA compliance.<\/p>\n Responding to questions TechCrunch sent Wednesday, regarding the EU\u2019s DSA enforcement in this area, a Commission spokesperson described Meta\u2019s \u201csubscription for no ads\u201d (SNA) offer, as the company refers to the \u2018consent or pay\u2019 tactic, as \u201ca fundamental shift from Meta\u2019s previous non-subscription-based service model\u201d.<\/p>\n \u201cDue to a current lack of information in the context of the introduction of the SNA options, the Commission is currently unable to ascertain whether Meta is upholding its obligations under the DSA, in particular concerning transparency about how content is delivered to users and potential effects on systemic risks,\u201d the spokesperson told us.\u00a0<\/span> They stipulated Meta must provide \u201cadditional information on the measures it has taken to comply with its obligations concerning Facebook and Instagram\u2019s advertising practices, recommender systems and risk assessments related to the introduction of that subscription option\u201d, adding:\u00a0<\/span> The EU did not provide any steer on how long these assessments \u2014 nor any enforcement \u2014 might take it. But an RFI is a preliminary, info-gathering step.<\/span><\/p>\n (NB: Meta launched the ad-free subscription across the EU at the end of October<\/a>. While the deadline for Facebook and Instagram\u2019s compliance with the DSA expired in late August. So it\u2019s been operating the mechanism with the DSA in full force for almost five months.)<\/p>\n The EU\u2019s spokesperson went on to highlight the fact that under the DSA targeted advertising is expressly prohibited to minors \u2014 emphasizing<\/span>: \u201c<\/span>Hence minor users cannot be given the choice to opt in.\u201d<\/span><\/p>\n Meta has previously claimed<\/a> it does not offer the \u2018consent or okay\u2019 paywall to minors, writing in a blog post back in December: \u201cThe subscription for no ads will be available for people aged 18 and up, and we\u2019re continuing to explore how to provide teens with a useful and responsible ad experience given this evolving regulatory landscape.\u201d<\/p>\n However, accessing Facebook and Instagram does not entail robust age verification so it\u2019s not clear how Meta can be sure minors are not being served the mechanism and clicking on the consent option to gain access to its services \u2014 and having their data unlawfully processed by its adtech. If that\u2019s happening it would be a clear breach of the DSA. (Reminder: Confirmed breaches of the regime can lead to penalties of up to 6% of global annual turnover.)<\/p>\n For its part Meta<\/a> continues to maintain that its consent paywall is compliant with all relevant EU laws.<\/p>\n The Commission, meanwhile, has previously said<\/a> child protection is one of a handful of priority areas for its enforcement of the DSA.<\/p>\n In wider remarks about compliance requirements on Meta\u2019s business, the EU spokesperson told us: \u201cAccording to consumer law, consumers should be in a position to make economic choices in a fair and unbiased manner so that they do not take a decision that would be contrary to their interest.\u201d<\/p>\n \u201cConsumers are used to Facebook or Instagram being free of monetary payment (\u201czero price\u201d),\u201d they added. \u201cIf they are being offered to pay in order to not be exposed to advertising (and the agreement to share their data which comes with it), the new system needs to be well described without influencing towards one or the other option.<\/p>\n \u201cConsumers should be given time to reflect before making that decision, and not being put under pressure to accept it quickly.\u201d<\/p>\n As noted above, consumer protection groups have filed a number of complaints about Meta\u2019s privacy fee \u2014 arguing Meta is breaching EU consumer protection and privacy rules.<\/p>\n When the adtech giant launched consent or pay last year it immediately switched from providing<\/span> free access with tracking \u2014 but with the ability for EU users to opt out of use of their data for ads by exercising their right to object<\/a> to its claimed \u201clegitimate interest\u201d use of their data at that point \u2014 to offering a binary choice of being tracked or<\/em> paying a monthly subscription that starts at \u20ac9.99 per month per account<\/em> on web (or \u20ac12.99\/month on mobile).<\/span><\/p>\n There\u2019s currently no way for users in the EU to use Facebook or Instagram and not<\/em> be tracked.<\/p>\n Privacy rights campaigners challenging Meta\u2019s tactic, under the bloc\u2019s General Data Protection Regulation (GDPR), argue its pricing is way out of proportion<\/a> to the value it derives per user. They suggest Meta\u2019s strategy is a blatant attempt to circumvent EU laws by making privacy an unaffordable luxury. Or, basically, manipulation through economic coercion.<\/p>\n