The European Union (EU) is set to hit tech company, Meta (formerly the Facebook company) with a $1 billion fine over its ‘Pay or Consent’ model on Facebook, and Instagram.
Reports say the European Commission is preparing to slam Meta with the fine because of the ‘Pay or Consent’ model on Facebook and Instagram violating its Digital Markets Act (DMA).
The company’s “pay or consent” strategy for Facebook and Instagram advertising, according to regulators, limits consumer choice by requiring users to either pay a subscription fee or agree to the company’s massive data tracking, which the EU claims violates digital competition laws.
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“Meta’s “pay or consent” model may not provide a real alternative in case users do not consent, thereby not achieving the objective of preventing the accumulation of personal data by gatekeepers,” the European Commission’s preliminary assessment from 2024 states.
With CEO Mark Zuckerberg and U.S. government officials already strongly objecting to the EU’s regulatory activities, Meta is anticipated to contest the judgment, and if found guilty, its penalty might surpass the rumored $1 billion amount.
This possible penalty comes after the firm was hit with a record €1.2 billion GDPR charge for insufficient data transfer protections and a €797.72 million fine for linking Facebook Marketplace to its social media platform.