Last autumn, Meta started requiring EU users of Facebook and Instagram who wish to avoid tracking by the online giant to sign up to a paid subscription. The cost of this subscription can soar to a staggering €311 per year.[i] This move sparked significant backlash from consumers, civil society organisations and regulators across Europe. BEUC and its national members have already lodged two sets of complaints against the company.
In November, we alerted the Consumer Protection Cooperation network (which consists of national consumer protection authorities) about the unfair commercial practices employed by Meta in its communications with consumers. This was followed in February by complaints filed with national data protection authorities regarding Meta’s data processing practices which violate the General Data Protection Regulation (GDPR).
Meta is unwavering in its efforts to justify how these new practices serve consumers’ best interests and align with the spirit of the law. The reality, though, is that Meta’s assertions are nothing but smoke and mirrors, designed to deflect attention from the genuine concerns at hand.
Let’s delve deeper into the truth behind some of Meta’s myths on its pay-or-consent model.
Truth 1: Meta’s services have never been ‘free’
What Meta says: “We are committed to an ads-supported digital business model, because it is the cornerstone of an inclusive internet where everyone can access online services and content for free. It allows people to use services like Facebook and Instagram for free while benefiting from seeing personalised advertising, helping them discover new products and brands that are most relevant to them.“
Meta has consistently marketed its services as ‘free’ but, in reality, they never were. While users of Facebook or Instagram are not required to pay with money, they are obliged to provide their personal data in exchange for access to these services. Authorities have recognised that marketing these services as ‘free’ is a misleading commercial practice.
Truth 2: Nothing is forcing Meta to charge consumers
What Meta says: “However, Europe’s regulatory landscape is evolving. And with new regulatory interpretations of permitted legal bases for personalised advertising under the GDPR, as well as the coming into force of the Digital Markets Act, we are now required to offer people in the EU, EEA and Switzerland an alternative way of using Facebook and Instagram. […]Like countless other businesses, we believe it [pay-or-consent] allows us to meet changing regulatory obligations while offering users a clear choice.“
Meta prominently mentions the Digital Markets Act, but this recent law is not the main reason Meta has started asking consumers for their consent. In fact, it is under the GDPR that authorities have repeatedly found that the company lacked a valid legal basis for processing consumers’ personal data. While Meta vaguely acknowledges these regulatory decisions, it refers to them as ‘new regulatory interpretations’ which is wide of the mark, because the company is insinuating that regulators changed their stance. In fact, authorities have simply applied the GDPR to Meta’s business model, even if it unfortunately took over five years to do so.
Under the GDPR, Meta is obliged to seek consent, meaning the company has in fact been processing consumers’ data without a valid legal basis since the law came into effect in 2018.
Ironically, Meta also speaks of ‘offering users a clear choice’, although our complaints show that the choice is neither clear, nor a real choice.
Truth 3: Meta’s pay-or-consent model is more than another subscription
What Meta says: “Subscriptions as an alternative to seeing advertising are a well-established and economically viable business model spanning many industries, from news publishing and gaming to music and entertainment. That’s why we believe it is the best compliance solution.“
There is nothing wrong with the first sentence. Meta is totally free to offer a paid ad-free service, and many other online services are indeed already doing this. However, everything is wrong with the rest of this paragraph. The straightforward ad-free subscriptions that can be found on many others online services are commercial offers based on economic business decisions of the respective providers. They are not ‘compliance solutions’.
What Meta does is tie its commercial offer (the ad-free subscription) with its legal obligation to obtain consent for processing personal data. Throughout its statement, Meta capitalises on this confusion by referring generally to a ‘subscription’ when in fact, the crux of the matter lies in obtaining consent. Again, offering an ad-free subscription as such is not the problem, the way Meta asks people for their consent under the GDPR, is.
And while some media publishers also rely on pay-or-consent, their services and business models differ fundamentally from those of Meta. The tech giant operates Facebook and Instagram which are major social media platforms, and is also a dominant player in the surveillance-based advertising industry. It therefore controls much of the online infrastructure that is crucial for displaying ads online, and is therefore in the position to impose its surveillance-based advertising model on the rest of the market. Furthermore, Meta’s dominant position also creates obstacles to the development of new and more privacy-friendly business models, thereby hindering innovation.
Most publishers and advertisers depend on this advertising infrastructure, having little choice but to accept the framework set up and controlled by Meta. but many are dissatisfied with these conditions. Some have even initiated legal action against Meta for its anticompetitive advertising business.
Truth 4: No authority has validated Meta’s pay-or-consent model
What Meta says: “Subscription for no ads’ addresses the latest regulatory developments, guidance and judgments shared by leading European regulators and the courts over recent years. Specifically, it conforms to direction given by the highest court in Europe: in July, the Court of Justice of the European Union (CJEU) endorsed the subscriptions model as a way for people to consent to data processing for personalised advertising. And even before that decision, the validity of a subscription service as part of a model to obtain valid consent had been acknowledged by numerous European data protection authorities, including in France, Denmark and Germany.”
Meta references a half-sentence in a recent ruling of the CJEU, which states that ‘those users are to be offered, if necessary for an appropriate fee, an equivalent alternative not accompanied by such data processing operations’. However, suggesting that the CJEU “endorsed the subscription model” is clearly an overstatement. The court did not provide a legal justification for Meta’s paid offer, as it was not the subject of that particular court case. Any company, including Meta, wishing to charge consumers a fee must still demonstrate compliance with all the stringent requirements for valid consent under the GDPR, which must be freely given, specific, informed, and unambiguous.
As of yet, there is no consensus among European data protection authorities, and no definitive decision has been reached. This is why several data protection authorities have formally requested the European Data Protection Board (EDPB) to issue an opinion on the validity of the pay-or-consent model.
Truth 5: Consumers do not want surveillance-based ads
What Meta says: “We are committed to an ads-supported digital business model, because it is the cornerstone of an inclusive internet where everyone can access online services and content for free. It allows people to use services like Facebook and Instagram for free while benefiting from seeing personalised advertising, helping them discover new products and brands that are most relevant to them.”
Meta is being dishonest here. The real reason Meta is so keen on this model is because it allows the tech giant to make a gigantic amount of cash and to remain one of the behemoths of an increasingly tech-dominated world.
Various surveys show that, in fact, consumers dislike surveillance-based ads, where their behaviour is monitored in order to show them personalised adverts. A YouGov/Global Witness survey from 2021 found that a majority of people do not want to receive any personalised ads, with only 11% that they were happy with their personal data being used to target them with ads.
People today have no choice but to accept the surveillance model that companies like Meta and Google impose, otherwise they would be excluded from an increasingly digitalised economy.
Conclusion
Through its public communication, Meta has been keen to shift the debate on the legality of its operations in the EU to one about whether pay-or-consent is acceptable.
The reality is that the tech company has rolled out its pay-or-consent system in a way that it gets exactly what it wants – Meta’s users are consenting to the company’s data collection but without informing them precisely what data is being collected, for what purpose, and despite clear evidence consumers do not like their behaviour being tracked for surveillance ads. So with our complaints, we are hoping to get to the bottom of things and bust Meta’s myths on its pay-or-consent system.
[i] The monthly fee for one account is 12.99 € when subscribing via the mobile version of Facebook/Instagram, or 9.99 € when subscribing via the desktop version. Each additional account costs 8 € or 6 € respectively, but only if the consumer links these accounts in Meta’s ‘Account Center’, which entails additional processing of personal data across Meta’s services. A consumer using one Facebook and one Instagram account on a mobile device, and not wishing to have their personal data combined and used across these accounts, must pay 25.98 € per month, or 311.76 € per year.