1 week ago
7 ARTICLE AD
Meta, under legal pressure in the European Union over a binary ‘pay us or consent to ad tracking’ choice it currently offers regional users of its social networks Facebook and Instagram, is changing how its regional ad business works again. Little wonder when compliance failure in this context risks fines of up to 10% of its global annual turnover.
The adtech giant’s latest attempt to smuggle its surveillance ads machine past EU laws is an offer to display what it’s couching as “less personalized ads”. The European regulatory framework tightened earlier this year with the advent of the bloc’s flagship market contestability regulation (the Digital Markets Act, or DMA).
In a blog post announcing a shift within “weeks” to how it targets ads at EU users, which was first reported by the WSJ, Meta said that users in the region who opt not to pay a subscription fee 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 than is currently the case. Right now, Meta leverages cross-service (and cross-site) tracking and profiling (also known as surveillance).
In other words, Meta is finally being forced to stop being quite so creepy about ads in the EU. Although the tech giant may be forced to go further still in the future when regulators reach a final decision on the DMA probe.
‘Less personalized ads’
The data points Meta claims it will use for the “less personalized” ad targeting that’s incoming for regional users are slated to include “a person’s age, location, gender, and how a person engages with ads.”
Whether that will be enough to satisfy EU regulators remains to be seen. The bloc is expected to conclude its DMA probe 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 too.
The core DMA legal issue for Meta is the law requires that, as a designated gatekeeper, it must obtain users’ consent for combining their personal data between designated core platform services (CPS) and other services. (It’s also GDPR consent standards that apply here.)
Both Facebook and Instagram are CPS — meaning that, since early March when DMA compliance kicked in, Meta has needed permission to track and profile service users’ activity in order to micro-target them with ads in the EU.
Thing is, Meta has not asked people’s permission for this pervasive tracking and profiling — it’s just offered a binary choice of accepting the surveillance or paying it a subscription fee for ad-free versions of the services.
The EU opened a DMA investigation of this binary choice in March. Then, in July, the Commission announced preliminary findings, saying it believes Meta’s ‘pay or consent’ model does not comply with the rules.
The Commission’s investigation of Meta continues. But — in the meanwhile — the company has now made a fresh move to try to reconfigure its ad business in a way it claims meets regulators’ requirements.
“The changes we’re announcing today meet EU regulator demands and go beyond what’s required by EU law,” Meta wrote in the blog post, without offering any detail to back up the claim.
It also states that it “remain[s] steadfast in our view that personalized ads are the best experience for people and businesses”. So there’s some mixed messaging in its PR as Meta rails against making a business decision it prefers not to.
As well as reducing how much personal data it will use to target ads, Meta has announced it’s immediately cutting the cost of the ad-free subscriptions by 40%.
This will see the price of monthly subscriptions for ad-free versions of Facebook and Instagram fall from €9.99 to €5.99/month on web; and €12.99 to €7.99/month on mobile (iOS and Android). (NB: Meta claims 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/month on the web and €5/month on iOS and Android for each additional account.
So Meta may be hoping to recover some revenue it may lose from having to run less targeted ads by picking up some subs for ad-free versions of the services. (Its blog post suggests it will be degrading the user experience for users of the free versions of Facebook and Instagram in Europe by running unskippable ads that periodically take over the whole screen, which could drive some irritated users to shell out to go fully ad-free.)
Meta claims the lower pricing for the ad-free subscriptions (not its first price-drop here, by the way) will make them “one of the cheapest across our peers”. Though what it’s basing that comparison on isn’t clear since rival social media services, like TikTok, remain free to access.
Asked about Meta’s announcements, the EU declined to offer a verdict while its DMA investigation continues.
Commission spokeswoman Lea Zuber told TechCrunch: “The new model introduced by Meta is under Meta’s sole responsibility, and it is neither endorsed by nor agreed with the Commission.”
It is too soon to speculate about the impact on the pending non-compliance proceedings, she added, noting: “Our objective is to bring Meta to full and effective compliance in this matter as soon as possible.”
