The European Union is set to accuse the American company Meta Platforms of non-compliance with the Digital Markets Act (DMA) in force in the region. This comes just days after similar charges were brought against Apple. According to available data, the main industry regulator, the European Commission, is not satisfied with Meta’s “pay or accept” business model. The point is that the Meta-owned social networks Facebook and Instagram can be used for free, but in this case, the user confirms consent to the collection and processing of their data. If the user wants their data to remain confidential, then they need to pay for a subscription.
Issues with Meta’s Business Model
Informed sources indicate that, according to the regulator, the choice under the “pay or agree” model gives users a false alternative. A financial barrier potentially forces them to agree to data processing to continue interacting with the company’s social networks for free. According to the European Commission, consumers should receive an “equivalent offer,” which is not currently the case.
New EU legislation requires tech giants to obtain users’ consent if they “intend to combine or cross-use their personal data across different services.” Official representatives of the European Commission and Meta have so far refrained from commenting on the American company’s accusations of violating the DMA. If Meta is found guilty, it faces a fine of up to 10% of global annual revenue, and in the event of a repeat violation, it could rise to 20%, notes NIX Solutions.
Implications for the Tech Industry
This development signifies the EU’s continued scrutiny of tech giants’ practices. We’ll keep you updated as this story progresses. The outcome of these allegations could set a significant precedent for how tech companies handle user data and comply with regional regulations. As we await further comments from the European Commission and Meta, the tech industry watches closely, anticipating the potential implications of this legal battle.