Backlash over Meta’s ad-free subscription model in the European Union has begun just one month into its launch.
On Thursday, Europe’s largest consumer group, the European Consumer Organization (BEUC), filed a complaint with the network of consumer protection authorities. In a press release, BEUC alleges that Meta’s subscription fees for ad-free access to Facebook and Instagram are so unreasonably high that they breach laws designed to protect user privacy as a fundamental right.
“Meta has been rolling out changes to its service in the EU in November 2023, which require Facebook and Instagram users to either consent to the processing of their data for advertising purposes by the company or pay in order not to be shown advertisements,” BEUC’s press release said. “The tech giant’s pay-or-consent approach is unfair and must be stopped.”
On October 30, Meta announced it would begin offering people in the EU, the European Economic Area, and Switzerland a choice between paying a subscription fee to opt out of any personalized advertising or consenting to ad targeting to continue accessing Facebook and Instagram for free.
The fee on Facebook costs 9.99 euros/month on the web or 12.99 euros/month on iOS and Android, which currently covers linked Instagram accounts. However, starting March 1, 2024, costs will go up. After that date, linking your Instagram or additional Meta accounts to your subscription will cost an extra 6 euros/month on the web and 8 euros/month on iOS and Android.
Meta said that it made this change after a July ruling by the Court of Justice of the European Union (CJEU) that “recognized that a subscription model, like the one we are announcing, is a valid form of consent for an ads-funded service.”
That CJEU ruling specifically said that “users must have the freedom to individually refuse consent to certain data processing operations… without being forced to completely waive the use of the service,” and requires that users “are offered an equivalent alternative” to consenting to data collection, “if necessary for a reasonable fee.”
The major question Meta faces now is deciding whether its subscription prices are reasonable or, as BEUC has alleged, “very high.” BEUC argued that because many users will likely consent to unwanted data collection just to avoid a high fee, Meta is only allegedly giving the illusion of choice while pushing consumers “into making a choice they might not want to take.”
“Given the market power of Meta’s Facebook and Instagram services in the EU and the very strong network effects of social media platforms (since all your friends are on Facebook and Instagram), consumers do not have a real choice because if they quit the services they would lose all their contacts and interactions built over the years,” the BEUC argued. “The very high subscription fee for ‘ad-free’ services is also a deterrent for consumers, which means consumers do not have a real choice.”
BEUC also argued that Meta allegedly deceives users into thinking that opting in to a paid subscription means there will be “less tracking and profiling.” Instead, it appears to the consumer group that “users are likely to continue to have their personal data collected and used, but for purposes other than ads,” because Meta has so far only promised “while people are subscribed, their information will not be used for ads.”
In a statement to Reuters, BEUC Deputy Director General Ursula Pachl said that “Meta is breaching EU consumer law by using unfair, deceptive, and aggressive practices, including partially blocking consumers from using the services to force them to take a decision quickly, and providing misleading and incomplete information in the process.”
Meta accused of extorting consent
BEUC’s complaint was jointly filed by 18 members of the EU’s network of consumer-protection authorities. The lawsuit quickly followed a complaint filed two days earlier with Austria’s privacy watchdog by the privacy advocacy group NOYB.
NOYB’s complaint centered on an anonymous complainant in the EU who “is in a persistent financial emergency” and could not afford the fees required to opt out of sharing data with Facebook or Instagram. This complainant is not alone, NOYB said, pointing out that 1-in-5 people in the EU is at risk of poverty and similarly could not afford so-called “pay or OK” systems that force a choice between “paying the rent or having privacy.”
“Instead of giving users a clear ‘yes/no’ choice, Meta is now trying to extort supposed consent from its users with a ‘yes or pay’ choice,” NOYB’s complaint said.
According to NOYB, industry numbers suggest that only 3 to 10 percent of people “want to be tracked,” but “more than 99 percent decide against a payment when faced with a ‘privacy fee.'”
That discrepancy is a problem, NOYB argued, because “under EU law, consent to online tracking and personalized advertising is only valid if it is ‘freely given.'” The law is designed to “ensure that users only give up their fundamental right to privacy if it is their genuine free will to do so.” Ultimately, NOYB warned, EU officials condoning Meta’s current ad-free subscription fees risks turning privacy into a “luxury good,” as every other online platform would likely follow in Meta’s footsteps.
“Given that the average phone has 35 apps installed, keeping your phone private could soon cost around €8,815 a year,” NOYB estimated. For a family of four, “data protection could soon cost €35,000,” NOYB cautioned, which is “more than the average full-time income in the EU.”
According to Reuters, Meta has argued that its subscription prices are “in line” with Google’s YouTube, Spotify’s premium services, and Netflix.
NOYB has asked the Austrian Data Protection Authority to investigate the complainant’s case and order Meta to stop any invasive data collection targeting the complainant, delete all of complainant’s personal data collected, and “obtain legally valid consent from the complainant” without requiring “clearly overpriced” fees.
NOYB also wants Meta to clarify what kinds of data collection subscribers may be consenting to, apart from the information Meta collects and uses for ad-targeting. As it stands, NOYB said it’s unclear to EU users if paying the subscription fee means personal data is “no longer collected for tracking” or if the activities will still be tracked, but “not analyzed for advertising purposes.”
If EU officials decide that Meta’s ad-free subscription model is deceptive or unfair, as NOYB and BEUC have alleged, Meta risks fines and potentially costly changes to its business.
It’s too soon to say if NOYB’s or BEUC’s complaints will win out, but NOYB has been a thorn in Meta’s side since the EU passed tougher privacy laws.
NOYB was behind the successful legal push in 2018 that resulted in Meta being fined more than $400 million. That decision is what forced Meta to gain explicit consent from users before collecting some kinds of personal data. Meta’s subscriptions were launched, the tech company said, to comply with EU privacy laws while continuing “to offer people free access to our personalized products and services regardless of income.”
If Meta is not stopped now, NOYB warned, there could be a domino effect if other tech giants launch subscription models. In fact, that appears to already be happening, TechCrunch reported, since TikTok is testing similar ad-free subscription services outside the US. If the EU doesn’t quickly crack down on Meta, NOYB founder Max Schrems warned, privacy may only be an option for the EU’s wealthiest citizens.
“There were times when fundamental rights were reserved for the rich,” Schrems said. “It seems Meta wants to take us back for more than a hundred years.”