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Meta, which is under legal pressure in the European Union over the “pay us or agree to ad tracking” option it currently offers to regional users of its social networks Facebook and Instagram, is changing how its regional ad business operates again. It is no wonder then that failure to comply in this context can result in fines of up to 10% of its global annual turnover.
The ad tech giant’s latest attempt to smuggle its surveillance advertising machine past EU laws is a show to showcase what it portrays as “less personalized ads.” The European regulatory framework was tightened earlier this year with the advent of competition regulation in the bloc’s main market (the Digital Markets Act, or DMA).
In a Blog post Announcing a shift within ‘weeks’ to how ads are targeted to EU users, which was first reported by Wall Street JournalMeta said users in the region who opted out of paying the subscription fees it launched just over a year ago (for ad-free versions of its social media services) will soon be shown ads that use less personal data for “context”-based targeting. What is the current situation. Currently, Meta is promoting cross-service (and site) tracking and profiling (also known as monitoring).
In other words, Meta was finally forced to stop being so creepy about advertising in the EU. Although the tech giant may have to move on in the future when regulators reach a final decision on the DMA investigation.
“Less personalized ads”
The data points that Meta claims it will use to target incoming “less personalized” ads to regional users are set to include “a person’s age, location, gender, and how the person interacts with ads.”
We will have to see if this is enough to satisfy EU regulators. The bloc is expected to conclude its investigation into the DMA next year. But it’s worth noting that Meta is also facing ongoing privacy challenges to its ad tracking model under the General Data Protection Regulation (GDPR), and consumer protection complaints as well.
The primary legal issue for Meta’s DMA is the law that requires Meta, as a designated gatekeeper, to obtain consent from users to combine their personal data between designated platform services (CPS) and other services. (It’s also the GDPR consent standards that apply here.)
Both Facebook and Instagram are CPS – meaning that since early March when compliance with the DMA began, Meta has needed permission to track the service’s users’ activity and profile in order to precisely target them with ads in the EU.
The thing is, Meta didn’t ask people for permission for this pervasive tracking and profiling — it just offered a binary choice of accepting the monitoring or paying a subscription fee for it to get ad-free versions of the services.
The European Union opened an investigation into the DMA over this binary choice in March. Then, in July, the Commission announced preliminary findings, saying it believed Meta’s “pay or consent” model did not comply with the rules.
The committee’s investigation into Meta continues. But – in the meantime – the company has now taken a new step to try to reshape its advertising business in a way that it claims meets the requirements of regulators.
“The changes we are announcing today meet the demands of EU regulators and go beyond what is required by EU law,” Meta wrote in a blog post, without providing any details to support the claim.
It also states that it “remains steadfast in our view that personalized advertising is the best experience for people and businesses.” So there are some mixed messages in her PR as Meta is opposed to making a business decision she would rather not make.
The ad-free sub is getting another price drop
In addition to reducing the amount of personal data it will use to target ads, Meta announced that it will immediately reduce the cost of ad-free subscriptions by 40%.
This will drop the price of monthly subscriptions for the ad-free versions of Facebook and Instagram from €9.99 to €5.99 per month on the web; and €12.99 to €7.99 per month on mobile (iOS and Android). (Note: Meta claims that the higher cost on mobile is a result of fees charged by Google and Apple through their app stores.)
People with more than one Facebook or Instagram account will be charged €4 per month on web and €5 per month on iOS and Android for each additional account.
So perhaps Meta is hoping to recoup some of the revenue it might lose from having to run less targeted ads by opting for some subscriptions to ad-free versions of the services. (Her blog post notes that it will degrade the user experience for users of the free versions of Facebook and Instagram in Europe by running non-skippable ads that periodically take over the entire screen, which could prompt some angry users to sign out for the entire ad. Free.)
Meta claims that the low price for ad-free subscriptions (not the first price drop here, by the way) will make it “one of the cheapest subscriptions among our peers.” Although the basis for this comparison is not clear given that competing social media services, such as TikTok, are still available for free.
Asked about the Meta ads, the EU declined to provide a ruling while the DMA investigation continues.
“The new model presented by Meta is under the sole responsibility of Meta, and has neither been approved by nor agreed with the Commission,” Commission spokeswoman Lea Zuber told TechCrunch.
She added that it was too early to speculate on the impact on the pending non-compliance actions, noting that “our goal is to bring Meta to full and effective compliance in this matter as soon as possible.”
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