EC Coordinates Action Against Meta's Pay-or-Consent Model

The Consumer Protection Cooperation (CPC) Network sent a letter following concerns that Meta's ‘pay or consent' model might breach EU consumer law. The European Commission coordinated the action led by the French Directorate General for Competition, Consumer Affairs and Fraud Prevention.

The action started in 2023, immediately after Meta had requested consumers overnight to either subscribe to use Facebook and Instagram against a fee or to consent to Meta's use of their data to be shown personalized ads, allowing Meta to make revenue out of it (‘pay or consent'). Consumer protection authorities assessed several elements that could constitute misleading or aggressive practices, in particular, whether Meta provided consumers upfront with true, clear, and sufficient information.

They analyzed whether this information allowed consumers to understand the implications of their decision to pay or to accept the processing of their data for commercial purposes on their rights as consumers. In addition, CPC authorities are concerned that many consumers might have been exposed to undue pressure to choose rapidly between the two models, fearing they would instantly lose access to their accounts and network of contacts.

This coordinated action by the CPC against Meta comes on top of other ongoing EU and national procedures related to the same model. This action focuses specifically on the assessment of Meta's practices under EU consumer law and is distinct from the ongoing investigations against the company by the EC on its ‘pay or consent' model potentially breaching the Digital Markets Act, the EC formal request for information under the Digital Services Act, and the assessment by the Irish Data Protection Commission under the General Data Protection Regulation.

CPC authorities identified several practices in the context of Meta's roll-out of its new business model that raise concerns and could potentially be considered unfair and contrary to the Unfair Commercial Practices Directive (UCPD) and the Unfair Contract Terms Directive (UCTD). The body claims Meta is misleading consumers by using the word ‘free' while, users who do not want to subscribe against a fee, require them to accept that Meta can make revenue from using their data to show them personalized ads.

CPC also claims that the company is confusing users by requiring them to navigate through different screens in the Facebook/Instagram app or web version and to click on hyperlinks directing them to different parts of the Terms of Service or Privacy Policy to find out how their preferences, personal data, and user-generated data will be used by Meta to show them personalized ads. Meta is using imprecise terms and language, such as ‘your info' to refer to consumers ‘personal data' or suggesting that consumers who decide to pay will not see ads at all, while they might still see ads when engaging with content shared via Facebook or Instagram by other members of the platform.

CPC says the company is pressurising consumers who have always used Facebook/Instagram free of charge until the new business model was introduced, and for whom those networks often constitute a significant part of their social lives and interactions to make an immediate choice, without giving them a pre-warning, sufficient time, and a real opportunity to assess how that choice might affect their contractual relationship with Meta, by not letting them access their accounts before making their choice. Meta has until 1 September to reply to the letter of the CPC network and the EC and to propose solutions. If Meta does not take the necessary steps to solve the concerns raised, CPC authorities can decide to take enforcement measures, including sanctions.