EU to Make Meta Pay for Meta Trying to Get Paid

Brussels set to follow up Apple charges with Meta ‘pay or consent’ case

EU is using introduction of Digital Markets Act to check the power of Big Tech

The Financial Times Javier Espinoza

Make room Apple, you're about to have a cellmate in your EU prison holding cell:¹

In preliminary findings to be issued this week, regulators will say that they are worried about Meta’s “pay or consent” model, said three people with direct knowledge of the matter. Facebook and Instagram users can currently opt to use the social networks for free while consenting to data collection, or pay not to have their data shared.

The regulators are expected to say that the choice presented by Meta’s model risks giving consumers a false alternative, with the financial barrier potentially forcing them to consent to their personal data being tracked for advertising purposes. A person familiar with the EU’s thinking said consumers needed to receive “an equivalent offer”.

First, I enjoy the continued ruse that "a person familiar with the EU's thinking" is anyone other than an EU official, as the FT has a 100% hit rate of pre-announcing these rulings. But I wonder why they're even bothering to leak them when the official rulings always come a day or two later – it's not really enough time for a trial balloon? To curry favor with the FT? Is it just the same person within the EU body who does it every time after they hear it's coming?

Second, what is "an equivalent offer" in the mind of the EU? Have they told Meta that or kept it vague to continue all parties down the "guess and check" path? Meta implemented the "pay or consent" (i.e. pay to have no ads shown) scheme obviously to try to adhere to the DMA rules, which seems like a pretty straightforward way to do it. But it seems that the EU would like something more akin to an option to neither pay nor have ads served to you. Or perhaps to have un-targeted ads? This would effectively destroy Meta's business so...

This is worse than the Apple situation in many ways as again, it's a very direct assault on Meta's entire business. Apple could do what the EU wants (assuming the EU even know what it wants, which is not clear at this point) and still exist as an entity selling devices. They obviously won't just do whatever the EU wants if they feel like it will actually harm their business, but they could. Meta cannot. So it's either erode their business (or hope the rest of the world creates enough buffer to pay for the EU getting all services for free or close to it) or pay a 10% (and as they keep running afoul of the rules, 20%) fine of their global revenue to the EU.

As this back and forth with Brussels continues, Apple has to at least think about pulling out of the EU market, at least for some of their "gatekeeper" products. But Meta may actually have no choice.

Margrethe Vestager, the bloc’s executive vice-president in charge of digital policy, said last week she found it “surprising” that some of the world’s largest companies “do not take compliance as a badge of honour”.

She said: “We are dealing with the biggest and most valuable companies on the planet. The DMA is not an excessive ask. [It] is plain vanilla to ask for a fair, open and contestable marketplace.”

Yes, very "plain vanilla" to ask a company to destroy their own business.

Update: Well it took a few whole hours after the FT report, but here are the official charges against Meta...

Meta's pay or consent model in crosshairs for breaching EU tech rules

Meta Platforms was charged by EU antitrust regulators on Monday for failing to comply with landmark tech rules

Reuters Foo Yun Chee

The European Commission, which acts as the EU competition enforcer, said the binary choice breaches the bloc's Digital Markets Act (DMA) which seeks to rein in the power of Big Tech, as it sent its preliminary finding to Meta.

It said the binary choice forces users to consent to the combination of their personal data and fails to provide them a less personalised but equivalent version of Meta's social networks.

"We want to empower citizens to be able to take control over their own data and choose a less personalised ads experience," EU antitrust chief Margrethe Vestager said in a statement.

So yes, they're asking for a less targeted ad option on Meta properties. "Less targeted" here sounds suspiciously like "un-targeted" since "less" is obviously going to be very open to interpretation. Regardless, while "less"/"un" targeted ads may not kill Meta overnight, it would effectively be writing the rules of decline on the wall...

Aside: weird that the FT and Reuters are using the exact same image in their stories. Weirder still, it's a stock photo taken for Reuters. Is this some sort of shade between the two publications? This note at the end of the Reuters post...

Reuters was the first to report that the EU competition enforcer would charge Meta with non-compliance under the Digital Markets Act.

...has seemingly been matched by this note which has been added to the updated FT story (after the charges were filed):

The Financial Times was first to reveal the commission’s move earlier on Monday.

Lol.

¹ Interesing pair of cellmates too, since currently no big tech companies would seem to dislike each other more. Hide the shivs! (Though they'll undoubtedly be getting more company, in the form of more American tech companies, soon.) And yes, there are echoes of what Apple did to Meta's business with their App Tracking Transparency changes...