Meta has long been at odds with European Union officials over Facebook and Instagram’s approach to targeted advertising. The company hopes to appease regulators with several changes to its advertising model in the region, including lowering the price of ad-free subscriptions. Starting November 13, this plan will cost 40% less, now just 6 euros ($6.36) per month when you sign up via the web, and 8 euros ($8.48) per month when you sign up with an iOS or Android device. Facebook and Instagram accounts cost an additional 4 euros per month on web and 5 euros per month on mobile.
The company will automatically reduce current subscribers to a lower price. It will ask users in the block again if they want to sign up.
Once this prompt appears (which can be ignored for a limited period of time), a third option appears for Facebook and Instagram users in the EU to choose from. If you don’t want to pay a subscription fee, you can instead choose to only show ads based on what you see in a particular session of your app. Meta also takes into account several important data markers, including “a person’s age, location, gender, and how they interact with ads.”
The company points out that these less personalized ads will naturally not be tailored to specific users’ interests. So people are probably less likely to click on such ads. To compensate for that (and to make this option less taxing on the meta), those who choose less personalized ad options may encounter ads that can’t be skipped. According to the Wall Street Journal, these will be displayed full screen.
“Such ad time is common on other services, and many competitors already offer it,” Mehta argues. “This change will allow us to continue to deliver value to advertisers and provide people with a non-personalized ad experience for free.”
Targeted advertising is Meta’s biggest source of revenue, but EU authorities are reportedly pressuring the company to offer a free, less personalized option to its apps. Mehta claimed that it would have a negative impact on the bottom line. Although it appears to have complied with the authorities’ requirements, the unskippable ad aspect could be interpreted as malicious compliance, as it worsens the user experience.
Meta claims that these changes to its advertising model “meet the requirements of EU regulators and go beyond what is required by EU law.” The company introduced ad-free subscriptions a year ago to comply with laws such as the Digital Markets Act (DMA) and stricter interpretations of the General Data Protection Regulation. Previously, they were mandated to ask users in their blocks for permission before showing personalized ads.
However, the EU was less favorable to the no-paid advertising approach. Research into the “consent or pay” model is ongoing. In July, the EU announced in preliminary findings that Meta had violated the DMA with the plan.
These recent changes are said to be part of Meta’s efforts to resolve the lawsuit, but the publication says talks between the EU and Meta have not yet concluded. Blockchain regulators have until late March to complete their investigation and make a final decision. If Meta is determined to have in fact violated the DMA, it could be fined up to 10% of its global annual revenue. Based on total revenue in 2023, it could have to pay up to around $13 billion.
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