Meta is under renewed pressure from EU regulators over its controversial advertising model, which forces users to pay to stop their data from being sold to advertisers. The EU has warned that the company could face daily fines if it fails to bring its practices in line with the block’s digital regulations.
The so-called “pay or consent” model was introduced in November 2023, where users with paid subscriptions to Instagram or Facebook could opt out of personalised ads. Under the EU’s Digital Markets Act, if a user does not consent to their personal data being processed for targeted advertising, they must be offered “a less personalised but equivalent alternative.”
After the legislation became legally binding in March 2024, Meta introduced free, less-personalised options for European users that November. However, the Commission said it cannot confirm whether this was “sufficient to comply with the main parameters of compliance,” and that Meta will only make limited changes, a spokesperson told Reuters.
“With this in mind, we will consider the next steps, including recalling that continuous non-compliance could entail the application of periodic penalty payments beginning June 27 2025, as indicated in the non-compliance decision.”
The EU formally charged Meta for the violation last summer, and then fined it €200 million, the equivalent of $230 million, on April 23. The charge reflects the period between March and November 2024 when the Digital Markets Act was legally binding but Meta continued operating the original pay-or-consent model.
At the time, the Commission announced that it was still assessing whether the new option Meta introduced has brought it into compliance with the Digital Markets Act, and had requested “evidence of the impact that this new ads model has in practice.”
The Commission gave Meta 60 days from April 23 to ensure it complied with the legislation’s requirements or they risk periodic penalty payments of up to 5% of its average global daily revenue.
That time has now expired.
Meta thinks it’s being unfairly targeted by the EU
Meta has pushed back against the EU’s repeated criticism of its ad model, claiming it is being unfairly singled out. “A user choice between a subscription for no ads service or a free ad supported service remains a legitimate business model for every company in Europe — except Meta,” a Meta spokesperson told Reuters.
“We are confident that the range of choices we offer people in the EU doesn’t just comply with what the EU’s rules require — it goes well beyond them. At a time when there are growing voices across Europe to change direction and focus on innovation and growth, this signals that the EU remains closed for business.”
Meta’s Chief Global Affairs Officer, Joel Kaplan, echoed the sentiment that the company was being singled out when the fine was first announced. The Republican strategist said the penalties were an attempt to “handicap successful American businesses while allowing Chinese and European companies to operate under different standards.”
In February, Kaplan said that Meta “won’t hesitate” to escalate its concerns directly to US President Donald Trump if it believes EU policies discriminate against US tech firms. President Trump has been critical of the EU for its regulatory stance against the likes of Apple, Google, and Meta, declaring at January’s World Economic Forum that “they’re American companies, and they shouldn’t be doing that,” and “it’s a form of taxation.”
The Commission denies that it is targeting Meta unfairly, with a spokesperson telling Reuters “we have always enforced and will continue to enforce our laws fairly and without discrimination towards all companies operating in the EU, in full compliance with global rules.”
Meta vs the EU
In recent years, the EU has intensified efforts to rein in big tech, safeguard digital rights, and enforce stricter data privacy laws. Meta, whose business model hinges on data collection for targeted advertising, has repeatedly clashed with these regulations.
The owner of Facebook, WhatsApp, Instagram, and Threads has been slapped with upwards of €2 billion in fines for breaching the region’s antitrust and data protection rules, which include GDPR, the Digital Markets Act, the Digital Services Act, and other anti-competition regulations. This total includes a record €1.2 billion penalty in 2023 for mishandling user data transfers between Europe and the United States.
Beyond social media and data privacy, Meta has also clashed with the EU over AI regulations. In June 2024, it delayed the training of its large language models on public content shared on Facebook and Instagram after regulators suggested it might need explicit consent from content owners. As a result, Meta AI, its flagship AI assistant, was not released in the bloc until well over a year after its launch in the US.
Meta’s not the only one having trouble with the Digital Market Act. Read how Apple is having to bend to its rules after being hit with a €500 million fine.
