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The EU is set to accuse Facebook parent Meta of breaking the bloc’s historic digital rules, just a week after it filed a similar suit 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.
Tech giants had to comply starting in March this year.
In preliminary findings to be released this week, regulators are concerned about Meta’s “pay or consent” model, three people with direct knowledge of the matter said. Facebook and Instagram users can currently choose to use the social networks for free while consenting to data collection, or pay not to have their data shared.
Regulators are expected to argue that the choice offered by Meta’s model risks giving consumers a false alternative, with the financial barrier potentially forcing them to consent to the tracking of their personal data for advertising purposes. A person familiar with the EU’s thinking said consumers should be given “an equivalent offer”.
Under the new 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, when it opened compliance investigations into Meta and other tech giants.
Meta said in a statement: “The ad-free subscription follows the direction of Europe’s highest court and is in line with the DMA (Digital Markets Act). We look forward to continuing the constructive dialogue with the European Commission to bring this investigation to a conclusion.” The European Commission declined to comment.
In the event of a violation of the law, Meta is exposed to heavy penalties of up to 10 percent of its global turnover, and up to 20 percent in the event of a repeat offense. The EU’s preliminary findings must be finalized within a year of the start of its official investigation in March.
Margrethe Vestager, the EU’s executive vice-president in charge of digital policy, said last week that she found it “surprising” that some of the world’s biggest companies “do not see compliance as a badge of honour”.
She said: “We deal with the largest and most valuable companies on the planet. The DMA is not an excessive request. (It) is quite obvious to ask for a fair, open and contestable market.
The EU on Monday accused Apple of stifling innovation on its App Store, the first time it has used its new powers against a tech giant. Regulators said they were concerned about restrictions the iPhone maker placed on developers’ ability to “freely steer their customers” to promotions outside its ecosystem. Apple has denied any wrongdoing.
The allegations against Meta this week would show that Brussels wants to be seen as acting quickly against alleged anti-competitive behaviour, analysts said.
“Big tech companies are a priority for Brussels,” said one competition lawyer, who asked not to be named. “It is recognised that enforcement of traditional competition law is slow and somewhat ineffective.”
News Source : www.ft.com
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