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The EU has accused Facebook’s parent company Meta of violating the bloc’s historic digital rules, just a week after it brought a similar case against Apple.
The European Commission, the EU’s executive body, is exercising new powers granted by the Digital Markets Act – legislation aimed at improving consumer choice and opening markets for European start-ups to flourish. From March this year, the tech giants had to comply with this.
In preliminary findings published Monday, Brussels regulators said they were concerned about Meta’s “pay or consent” model. Facebook and Instagram users can currently choose to use the social networks for free while giving their consent to data collection, or pay to not have their data shared.
Regulators said the choice offered by Meta’s model puts consumers at risk of receiving a false alternative because the financial barrier may force them to consent to having their personal data tracked for advertising purposes.
The Financial Times was first to report the commission’s move earlier on Monday.
Under the bloc’s new digital rules, tech giants must obtain consent from users “when they intend to combine or cross-use their personal data across different core platform services,” the EU said in March as it opened compliance investigations against Meta and other tech giants.
The EU executive said Meta “users who do not consent should still be given access to an equivalent service that uses less of their personal data, in this case for the personalization of advertisements”.
Thierry Breton, EU Commissioner for the Internal Market, said: “Our preliminary view is that Meta’s “pay or consent” business model violates the DMA.
“The DMA exists to give users back the power to decide how their data is used and ensure that innovative companies can compete on an equal footing with tech giants in data access.”
Meta said in a statement: “An ad-free subscription follows the directive of the highest court in Europe and complies with the DMA [Digital Markets Act]We look forward to further constructive dialogue with the European Commission to complete this investigation.”
If Meta breaks the law, it faces heavy fines of up to 10 percent of its global turnover and up to 20 percent for repeat violations. The EU’s preliminary findings must be completed within a year of the start of the official investigation in March.
Margrethe Vestager, the bloc’s executive vice-president responsible for digital policy, said last week she found it “surprising” that some of the world’s largest companies “do not consider compliance as a badge of honour”.
She said: “We are dealing with the largest and most valuable companies in the world. The DMA is not an outrageous question. [It] It is pure vanilla to ask for a fair, open and contestable marketplace.”
On Monday, the EU accused Apple of harming innovation on its App Store, the first time it has used its new powers against a tech giant. Regulators said they were concerned about the iPhone maker’s restrictions on developers’ ability to “freely steer their customers” by steering them toward promotions outside its ecosystem. Apple has denied wrongdoing.
The accusations against Meta this week would show that Brussels would like to be seen as a company that takes swift action against alleged anti-competitive behavior, analysts said.
“Big Tech is a priority for Brussels,” says one antitrust lawyer, who asked not to be named. “There is a recognition that enforcement of traditional competition law has been slow and somewhat ineffective.”