Meta, the parent company of Facebook, is facing potential daily fines of up to $22.5 million from the European Union over its pay-or-consent model, which regulators claim violates the Digital Markets Act (DMA). The model, introduced in November 2023, requires users to pay a subscription fee to use Facebook and Instagram without having their data tracked or being bombarded with personalized ads. The initial cost was $15 per month, but it was later reduced to half that amount in 2024.
The EU argues that the pay-or-consent model contravenes the DMA, which requires large tech companies, known as ‘gatekeepers,’ to offer alternative versions of their services that use less personal data but still function effectively. In April, Meta was fined $234 million for not following these rules, and the EU now warns that further changes will be necessary to avoid daily penalties of up to 5% of its global turnover. Based on its 2024 revenue of $164.5 billion, these fines could reach up to $22.5 million per day.
Meta has refused to make additional changes, with sources stating that the company will not propose further amendments unless circumstances change. While the company declined to comment, it has previously asserted that it is in compliance with the DMA and that its model is a legitimate business approach. Meta has also criticized the European Commission for unfairly targeting its business practices, arguing that the model is a necessary adaptation to privacy regulations and market demands.
The dispute highlights the growing tension between EU regulators and major tech companies over data privacy and digital competition. The DMA, which took effect in 2023, aims to curb anti-competitive behavior and foster fairer online markets by imposing obligations on large tech firms. This ongoing conflict underscores the regulatory challenges faced by global tech companies operating within the EU, where stringent data protection laws and antitrust measures continue to shape the digital landscape.