Meta, the parent company of Facebook and Instagram, has offered to significantly reduce its subscription fee in the European Union (EU) a senior Meta executive said on Tuesday, in a bid to address concerns raised by privacy regulators and lawmakers. This move comes amidst ongoing scrutiny surrounding Meta’s data practices and its recently launched ad-free subscription service.
The Genesis of the Dispute: GDPR and the Right to Opt-Out
The story begins with the introduction of the General Data Protection Regulation (GDPR) in the EU in 2018. This regulation granted users more control over their personal data, including the right to opt out of data tracking for advertising purposes.
Meta’s Paid Solution: A Cause for Concern
In November 2023, Meta launched a subscription service in the EU that promised an ad-free experience on Facebook and Instagram to comply with the Digital Markets Act (DMA), which curbs its ability to personalize user advertisements without their consent. However, this service came at a cost, raising concerns from privacy advocates and user groups. Critics argued that Meta was essentially forcing users to pay to exercise their right to privacy, a right enshrined in the GDPR.
The Digital Markets Act (DMA) Adds Fuel to the Fire
Further complicating matters for Meta was the implementation of the Digital Markets Act (DMA) in the EU earlier this year. The DMA aims to curb the dominance of Big Tech companies and includes provisions related to how user data is collected and monetized. Meta’s subscription model, some argued, ran counter to the spirit of the DMA.
Meta Cuts its Losses: Offering a Lower Price Point
Facing mounting pressure from regulators and user dissatisfaction, Meta has offered to halve its subscription fee for EU users. This price reduction, from €9.99 to €5.99 per month, signifies Meta’s willingness to compromise and potentially find a solution that satisfies both user privacy concerns and the company’s need to generate revenue.
“We have wanted to accelerate that process for some time because we need to get to a steady state … so we have offered to drop the price from 9.99 to 5.99 for a single account and 4 euros for any additional accounts,” Meta lawyer Tim Lamb told a European Commission hearing.
“That is by far the lowest end of the range that any reasonable person should be paying for services of this quality. And I think that is a serious offer. The regulatory uncertainty at the moment is out there and it needs to settle down quickly.”
Read Also: Meta introduces paid subscription plan for users in Europe to use Facebook and Instagram without ads
Activists’ stance on the Price Cut
Many people have shared their views on the proposed price cut. one of them is from Max Schrems the Austrian privacy activist.
He said the issue is not about the fee.
“We know from all research that even a fee of just 1.99 euros or less leads to a shift in consent from 3-10 percent that genuinely want advertisements to 99.9 percent that still click yes. The GDPR requires that consent must be ‘freely’ given,” he said, referring to the EU privacy legislation.
“In reality, it is not about the amount of money – it is about the ‘pay or okay’ approach as a whole. The entire purpose of ‘pay or okay’ is to get users to click on okay, even if this is not their free and genuine choice. We do not think the mere change of the amount makes this approach legal.”
The Verdict is Still Out
Whether Meta’s price cut will appease regulators remains to be seen. The company is currently in talks with the Irish Data Protection Commission, the lead data protection authority for Meta in the EU. The outcome of these discussions will determine if the subscription model, even at a lower price, complies with EU regulations.
The Future of Data Privacy and User Choice
Meta’s situation in the EU highlights the ongoing tension between user privacy, data monetization, and the business models of major tech companies. This case will likely be closely watched by regulators and privacy advocates worldwide, as it could set a precedent for how user data is handled and how much control users have over their online privacy.
