EU finds that Meta violates DMA with its pay or consent approach

The EU has charged Meta with violating the Digital Markets Act (DMA), a major setback for huge IT companies. Meta, along with Google and Apple, is one of the tech giants (identified as "gatekeepers") mandated to comply with the groundbreaking rule by March this year.

The European Commission launched an investigation into all three corporations just two weeks after the act went into effect, raising worries that the procedures they implemented fell short of meeting the DMA's requirements. In the case of Meta, this is about the "pay or consent" approach for data sharing.

The concept offers a binary choice to EU Facebook and Instagram users. They can either use the platforms for free and agree to data collecting for advertising purposes, or they can pay a monthly subscription for the ad-free tier, which protects their data from sharing.

Meta believed that this option would meet the DMA's requirement that enterprises get clear user consent before mixing or cross-using personal data across multiple core platform services. The European Commission has now published its early findings, which conclude that the model violates the regulations.

According to the regulator, this binary choice does not present users with an alternative version of social networks that uses less personal data. Due to the financial barrier, users are unable to "freely consent" to the combining of their personal data.

If the EU's inquiry finds that Meta is breaking the laws, the computer behemoth could face fines of up to 10% of its total global revenue. In the event of many breaches, the sum may increase by up to 20%.

With the DMA's increased power, the EU is challenging big tech's monopolistic activities. The European Commission has warned Apple for violating the rules by preventing app makers from "freely steering" users to alternative options on the App Store.

"We are dealing with the biggest and most valuable companies on the planet," EU Competition Commissioner Margrethe Vestager stated in a speech last week. "The DMA is not an excessive ask, it's plain vanilla to ask for a fair, open, and contestable marketplace."