Meta has proposed an alternative to its 'pay or consent' model for Facebook and Instagram in the EU, offering users fewer personalized ads to avoid further fines. The European Commission announced the changes on Tuesday as part of an ongoing investigation under the Digital Markets Act. Regulators will now evaluate the proposal before deciding on closing the case.
Meta agreed to modify its business model in the European Union following talks with the European Commission. The social media company now provides users with a third option for its services: access to Facebook and Instagram with reduced personalized advertisements, alongside the existing choices of consenting to data tracking or paying for an ad-free experience.
This development stems from an EU probe launched into Meta's original policy, which required users to either allow tracking for targeted ads or subscribe to a premium version without them. In April, the Commission fined Meta 200 million euros and mandated changes, with potential daily penalties escalating to 5 percent of the company's average daily global revenue for non-compliance. Reports in October indicated optimism for a resolution between the parties.
The Commission stated, “The case is not closed, but it is a very good step forward and we will now monitor it from here.” Meta responded, “We acknowledge the European Commission’s statement. Personalized ads are vital for Europe’s economy.”
The investigation falls under the EU's Digital Markets Act, aimed at curbing the influence of large tech firms. This comes amid broader tensions, as the US Trump administration has criticized EU tech regulations. For instance, last week the Commission fined X, owned by Elon Musk, 120 million euros for transparency violations, prompting rebukes from US officials like Secretary of State Marco Rubio, who called it “an attack on all American tech platforms and the American people by foreign governments.” US Ambassador to the EU Andrew Puzder described the fine as “the result of EU regulatory over-reach,” adding that the administration opposes “censorship and will challenge burdensome regulations that target US companies abroad.”
Recently, the Commission also initiated probes into Alphabet over search result rankings, and into Amazon and Microsoft regarding cloud services. Days before this announcement, Brussels started an antitrust review of Meta's policies on AI providers accessing WhatsApp.