Meta Platforms (META.O) could face daily fines if European Union regulators decide that changes it made to its “pay or consent” model do not comply with a competition order issued in April, the European Commission warned on Friday.
This warning comes two months after the US-based social media giant was fined 200 million euros ($234 million) for violating the provisions of the Digital Markets Act (DMA).
DMA aims to limit the market dominance of large technology companies.This latest move by the European Commission shows that it is maintaining its determined oversight of large technology firms, despite criticism from the US.
US officials argue that such regulations specifically target American companies.Daily Fines Can Reach Up to 5%
According to the DMA, failure to comply with obligations can result in a daily fine of up to 5% of the company’s global daily turnover. The Commission stated that Meta’s “pay or accept” model, implemented in November 2023, violated the DMA until November 2024, but that the company subsequently made some adjustments to the model by reducing the personal data used in targeted advertising.
These changes are being closely monitored by the Commission.Meta’s model offers Facebook and Instagram users the option of either accepting ad tracking in exchange for free service or paying for an ad-free version.
Commission: Compliance May Not Be Sufficient
The European Commission stated that it is not yet clear whether this new model, implemented in November, fully complies with DMA. A spokesperson said, “The Commission cannot verify at this stage whether the adjustments made meet the criteria set out in the non-compliance decision.” The Commission also announced that if Meta’s changes are deemed insufficient, regular fines could be imposed from June 27, 2025. Meta’s Strong Reaction Meta criticized the Commission’s stance, arguing that the company was unfairly targeted and that the rules had been constantly changed during the negotiations over the past two months. A company spokesperson stated, “Offering users the choice between an ad-free subscription or an ad-supported free service is a legitimate business model that applies to every company in Europe — Except for Meta.”
The spokesperson also said, “We are confident that the options we offer in the EU not only comply with the rules, but go far beyond them,” and added:
“At a time when calls for innovation and growth are increasing across Europe, this attitude shows that the EU is still closed to doing business.”
