Unlock Editor’s Digest for free
FT editor Roula Khalaf picks her favorite stories in this week’s newsletter.
The EU has accused Facebook’s parent company Meta of breaching the bloc’s crucial digital rules, just a week after it brought a similar case against Apple.
The European Commission, the EU’s executive body, is exercising new powers granted by the Digital Markets Act – legislation aimed at improving consumer choice and opening up markets for European start-ups to flourish. The tech giants have had to comply since March this year.
In preliminary findings released on Monday, Brussels regulators said they were concerned about Meta’s “pay or consent” model. Facebook and Instagram users can currently choose to use the social network for free while agreeing to data collection, or they can pay to have their data not shared.
Regulators said the choice presented by the Meta model risks giving consumers a false alternative, with a financial hurdle potentially forcing them to agree to have their personal data tracked for advertising purposes.
The Financial Times first revealed the commission’s move earlier on Monday.
Under the bloc’s new digital rules, tech giants must obtain consent from users “when they intend to combine or cross-use their personal data across different core platform services,” the EU said in March as it launched a compliance investigation against Meta and other technologies. giant.
The EU executive said that Meta “users who do not consent should still have access to an equivalent service that uses less of their personal data, in this case for advertising personalization”.
Thierry Breton, EU Commissioner for the Internal Market, said: “Our preliminary view is that Meta’s ‘pay or agree’ business model is at odds with the DMA.
“The DMA is here to give back the power to users to decide how their data is used and ensure that innovative companies can compete on an equal footing with the tech giants for access to data.”
Meta said in a statement: “The ad-free subscription follows the guidelines of the highest court in Europe and complies with the DMA [Digital Markets Act]. We look forward to further constructive dialogue with the European Commission to bring this investigation to a close.
If found in violation of the law, Meta will face hefty fines of up to 10 percent of its global turnover and up to 20 percent for any repeat violations. The EU’s preliminary findings must be completed within a year of the start of the official investigation in March.
Margrethe Vestager, the bloc’s executive vice-president responsible for digital policy, said last week that she found it “surprising” that some of the world’s biggest companies “don’t take compliance as a badge of honour”.
She said: “We deal with the biggest and most valuable companies on the planet. DMA is not an excessive requirement. [It] is plain vanilla asking for a fair, open and competitive market.”
Last Monday, the EU accused Apple of undermining innovation in its App Store, the first time it has used its new powers against the tech giant. Regulators said they were concerned about restrictions the iPhone maker is imposing on developers’ ability to “freely steer their customers” by directing them to promotions outside its ecosystem. Apple has denied any wrongdoing.
This week’s allegations against Meta would show that Brussels wants to be seen as moving quickly against alleged anti-competitive behaviour, analysts say.
“Big Tech is a priority for Brussels,” said an antitrust lawyer who did not want to be named. “It is recognized that the enforcement of traditional competition law has been slow and somewhat ineffective.”