Meta's ad-free subscription offering in Europe is facing
another regulatory challenge, with the Consumer Protection Cooperation Network
(CPC) issuing the company a notice to explain and potentially revise its
marketing of the option, which it says is currently misleading.
Last November, Meta launched its ad-free subscription
package in Europe, enabling EU users to pay a monthly fee to opt out of both
ads and data tracking, which is in line with new EU permission requirements.
The idea behind this move is to enable Meta to both comply with the new
regulations while also maintaining its revenue stream.
However, immediately after the launch, privacy advocates
raised concerns with the scheme, suggesting that Meta was forcing people to pay
for an offering that should be made available for free. EU regulations require
that users have clear control over how their data is used, and the argument is
that Meta's subscription package profits off of this element, which is not
within the spirit of the legislation.
After an investigation, earlier this month, the EU
Commission ruled that Meta's ad-free subscription plan does indeed fail to
comply with the Digital Markets Act (DMA), and has given the company the
opportunity to respond before facing potential fines over the program.
The CPC has found, through a separate investigation, that
Meta's ad-free package does not clarify the process enough for users. According
to the finding, "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."
The CPC's view is that Meta's ad-free offering misleads
users with its language, placing undue pressure on them to decide whether to
take up the subscription plan or not, while Meta's overall documentation around
the package is also confusing.
At issue here is that the CPC and the EU Commission both
seem to be conceding that Facebook and/or Instagram is an essential utility for
connection. Yet this is not a government-owned entity, it's a business, and as
such, it has the right to conduct its business as it sees fit.
As such, I'm not sure how either will be able to argue, in a
legal sense, that Meta cannot charge for its services, especially if these new
requirements will impact its bottom line. But both groups seem to be suggesting
that Meta needs to continue to offer its services for free, and make it clear
that users can avoid paying extra, while also restricting their personal data
usage.
It seems, then, that Meta does have a case to put forward in
support of its initiative, though Meta is also looking to work with EU
authorities, in order to maintain business relationships. Meta has already
offered to half the price of its ad-free package to appease EU regulators.
It's a bit of a messy case, and an interesting challenge for
the new EU regulations, as a ruling in Meta's favor could establish legal
precedent for similar cases moving forward. Which could water down the entire
Digital Markets Act (DMA), something EU authorities will be keen to push back
against.
In any event, it's another challenge for Meta in EU, which
could lead to changes in what it can offer. Meta now has until September 1st,
2024, to reply to CPC's notice. As social media marketers, it's essential to
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data tracking. Using an smm panel can help you navigate these complex
regulations and ensure your campaigns are compliant.
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