The European Commission says Facebook owner Meta’s “pay or consent” advertising model is in breach of its laws.
Under the tech giant’s new service in the EU, users must either consent to receiving personalised ads or pay €12.99 (£11) a month to remove them.
The Commission has told Meta it has taken “the preliminary view” that the “binary” advertising choice presented to users fails to comply with the Digital Markets Act (DMA).
But Meta contends that its EU advertising model is compliant.
“Subscription for no ads follows the direction of the highest court in Europe and complies with the DMA,” a Meta spokesperson said.
The firm faces a potential fine of up to 10% of its global revenue if the EU decides it has failed to comply with its rules.
The EU says the DMA stipulates users who do not consent “should still get access to an equivalent service which uses less of their personal data” – in this case for personalised advertising.
The move comes less than a week after EU regulators accused Apple of being in breach of the same laws over its App Store – the first time it had found a company in breach of the DMA.
Meta faces tougher obligations as one of several big tech firms designated “gatekeepers” under the bloc’s rules designed to maintain a level-playing field and competitiveness for digital platforms.
When it adopted its “pay or consent” model in 2023, it raised concerns from a number of European data watchdogs.
The European Data Protection Board (EDPB) adopted an opinion in April which said platforms charging a fee for accessing an equivalent version of their services without personalised ads “should give significant consideration to offering an additional alternative”.
Meta offered to lower its base subscription fee from €9.99 to €5.99 to try and ease regulators’ concerns in March.
But the Commission says Meta’s model does not amount to a real choice for users.
“We want to empower citizens to be able to take control over their own data and choose a less personalised ads experience,” said Margrethe Vestager, the Commission’s executive vice-president and competition policy chief.
She added that the Commission’s investigation – launched at the end of March seeks to ensure that rivals are able to compete in the digital advertising market “where gatekeepers like Meta have been accumulating personal data of millions of EU citizens over many years”.
It aims to conclude its investigation within the next 12 months.