European consumer groups condemn Meta’s self-serving ad-free sub as ‘unfair’ and ‘illegal’

Days after Meta received a privacy complaint in the EU over its latest controversial shift in legal basis for processing people’s data for ads, consumer groups across the region are filing their own complaints.

Nearly 20 consumer protection organizations agree that Meta’s switch to forcing users to agree to being tracked and profiled so it can keep microtargeting them is “unfair” and “illegal” and violates EU consumer protection law “on several counts.”

Starting this month, EU users of Meta’s Facebook and Instagram social networks have the ‘choice’ to agree to being tracked and profiled by the behavioral advertising business to continue or get free access to its products, or to pay at least €9.99 per month for an ad-free version of its mainstream social networks. Meta now offers EU users either their privacy or their money.

The European Consumer Organisation (BEUC) said in a press release that the network of consumer protection authorities (CPC) will receive the complaint today. “This is an unfair choice for users, which runs afoul of EU consumer law on several counts and must be stopped.”

BEUC and 18 of its member organizations—consumer advocacy groups in Bulgaria, Czech Republic, Denmark, France, Greece, Italy, Latvia, Lithuania, the Netherlands, Norway, Poland, Slovakia, Slovenia, Spain, and Sweden—have filed the complaint.

The groups are criticizing Meta’s “pay-or-consent model” implementation and the model itself as “illegal” and “unfair, deceptive, and aggressive.” They also raised data protection concerns, which Noyb, a privacy rights non-profit, filed with the Austrian data protection authority this week.

Ursula Pachl, BEUC deputy director general, stated:

The choice the tech giant is currently providing to consumers is unfair and illegal — the millions of European users of Facebook and Instagram deserve far better than this. Meta is breaching EU consumer law by using unfair, deceptive and aggressive practices, including partially blocking consumers from using the services to force them to take a decision quickly, and providing misleading and incomplete information in the process. Consumer protection authorities in the EU must now spring into action and force the tech giant to stop this practice.

BEUC summarizes Meta’s model’s consumer protection law issues:

• Meta is blocking Facebook and Instagram until users choose one, which is aggressive under European consumer law. By persisting and creating urgency, Meta forces consumers to make a decision they may not want to.
• Customers may also believe that choosing the paid subscription as presented is a privacy-friendly option with less tracking and profiling. Users’ personal data will likely be collected and used for non-advertising purposes.
• Consumers cannot make informed decisions because Meta provides misleading and incomplete information. Meta is misrepresenting the choice as between a paying and a ‘free’ option, when the latter is not ‘free’ because consumers pay Meta for their data, as previous court rulings have stated.
• Meta’s Facebook and Instagram services have market power in the EU, and social media platforms have strong network effects (since all your friends are on Facebook and Instagram), so consumers have no choice but to keep using them or lose all their contacts and interactions. The high subscription fee for “ad-free” services deters customers, leaving them with no choice.

Pachl added, “The company’s approach also raises concerns regarding the GDPR.” After its own assessment, BEUC may file a complaint about Meta’s data protection compliance with the relevant privacy authority, according to a spokesman. He said it’s too early to say if it will do that.

Ireland’s Data Protection Commission (DPC) has been reviewing Meta’s pay or consent offer for months. However, no conclusion has been expressed. Meta claims that its consent model for ad processing complies with the GDPR. However, the adtech giant also claimed performance of a contract and legitimate interests for processing, which were later found to be incompatible with the GDPR.

After Der Standard, an Austrian daily newspaper, pioneered the ‘pay or okay’ model Meta is trying to impose on EU users, copycat cookie paywalls appeared on many news publishers in Germany and elsewhere in the EU.

since 2021, noyb has complained to several data protection authorities that this ‘pay or okay’ GDPR consent model forces newspaper readers to “buy back their own data at exorbitant prices”.

Some DPAs approved of local newspapers’ cookie walls as a way to fund journalism. Meta is not a journalism company, so this argument falls apart. Instead of creating content for its social networks, the adtech giant gets it for free from the very users it now charges to use its services without being tracked and profiled for behavioral advertising. Even more ripoff is Meta’s ‘pay or okay’ model.

Austria’s DPA ruled in April that users must be able to consent to specific data operations, not blanket consent, on a Noyb complaint about cookie paywalls. The result left cookie paywalls unclear for GDPR compliance, and the privacy rights group vowed to fight the decision in court. “The European Court of Justice (CJEU) may make the final decision on ‘pay or okay’ in the long run,” Noyb estimated.

Meta is likely banking on another multi-year round of GDPR complaints, legal challenges, and—finally — a referral to the CJEU, followed by another long wait for a ruling, giving it several more years to run with its new legal basis fix and keep profiting from Europeans’ data.

Consumer protection may complicate its strategy.

In recent years, the CPC has coordinated EU consumer protection efforts by bringing together numerous organizations and agencies under the direction of one or more national consumer protection authorities. To facilitate dialogue, assess issues, and pressure unfair practices, the process involves the European Commission.

When forcing unfair behavior changes, CPC alert and mobilization can be faster than GDPR enforcement. Although it still takes months for the network to coordinate and press a trader they believe is breaking the law,

Networks can’t fine themselves either. National consumer protection authorities can enforce locally if dialogues and commitments don’t resolve issues. If consumer advocacy groups aren’t satisfied with Meta’s changes, they can still complain to national authorities to force enforcement action (CPAs can impose penalties of up to 4% of global annual turnover).

After receiving many CPC complaints, TikTok pledged last year to improve user reporting and disclosure requirements for ads, sponsored content, digital coins, and virtual gifts. BEUC was disappointed, saying “significant concerns” remained unresolved.

The CPC network may be able to get Meta to change how it presents ‘Hobson’s choice’ to users as a ‘quick win’ concession. Meta could also be pressured to lower the subscription fee to make tracking denial more affordable. Just speculating, but imagine if it offered a choice of tracking ads or paying €1 a year to not be tracked—it wouldn’t seem so self-serving.

BEUC’s spokesman said the ‘pay or consent’ choice Meta is offering and how it’s implemented are “closely interlinked” and therefore difficult to separate for consumer protection authorities.

Under consumer law, you must make an informed and fair subscription purchase. The data protection law affects the first question. If the practice violates the GDPR, it should be considered unfair and illegal under consumer law because it violates a law that protects fundamental rights; in any case, the choice is unfair, aggressive, and misleading.

Since Meta is subject to the EU’s shiny new Digital Markets Act (DMA) and Digital Services Act, the European Commission directly oversees it. Facebook and Instagram were designated VLOPs earlier this year. Since late August, they have been following that digital rulebook.

Both EU-wide laws, which demand users’ explicit consent and are simple to withhold or affirm, restrict the use of personal data for advertising. In the coming months, the Commission, the sole DSA enforcer on VLOPs, may weigh in on whether clicking accept or pulling out a credit card to pay a monthly charge are equally easy.

The regulation targets unfair or deceptive design by targeting choice interfaces that make it “more difficult or time-consuming” to choose. Although the DSA’s dark pattern provisions only apply where consumer protection and privacy laws, which also target unfair choices, don’t,