Meta May Allow Instagram, Facebook Users in Europe to Pay and Avoid Ads

15:06 01.09.2023

Facebook and Instagram's parent company, Meta Platforms, is reportedly considering the introduction of paid versions of the platforms for users in the European Union (EU) that would be free of advertisements. The move is seen as a response to increased scrutiny from EU regulators. According to sources familiar with the matter, those who subscribe to the paid versions would not be subjected to ads, while free versions with ads would still be available. The aim is to provide users with an alternative to Meta's ad-supported services, which rely on data analysis.

Meta's potential decision to introduce paid versions of Facebook and Instagram in the EU reflects the diverging experiences that users in the United States and Europe may have due to differing government policies. The company has been under investigation by EU antitrust regulators and faced a setback in July when a German court ruled against its data collection practices. This ruling followed a 2019 German order that prohibited Meta from collecting users' data without consent.

The cost of the paid versions of Facebook and Instagram for EU users is yet to be determined. A spokesperson for Meta declined to comment on the matter. For almost two decades, Meta's primary business model has revolved around offering free social networking services and generating revenue through advertising. However, the introduction of paid tiers highlights the need for companies to adapt their products to comply with data privacy regulations and other government policies, particularly in Europe.

EU regulators have already imposed restrictions on Meta's data practices. In July, the EU's highest court prevented Meta from combining user data from its platforms, including Facebook, Instagram, and WhatsApp, without explicit consent. Additionally, in January, the company was fined ?ぎ390 million by Irish regulators for coercing users into accepting personalized ads as a condition of using Facebook.

The potential introduction of paid subscriptions by Meta demonstrates how EU consumers could start experiencing different versions of technology products due to new laws, regulations, and court rulings. Recent EU regulations, such as the Digital Services Act, have given users the ability to block the use of personal data for generating social media feeds on platforms like TikTok and Instagram. The upcoming Digital Markets Act is expected to force major tech firms to alter their business practices to promote competition.

Meta has also faced significant fines and scrutiny from EU regulators in terms of privacy violations. The company was fined ?ぎ1.2 billion for violating privacy laws by sending EU citizens' data to US servers for advertising purposes. Meta has appealed this ruling. Furthermore, Meta has been fined for other GDPR violations, including a ?ぎ265 million fine for a data leak in 2021, and fines of ?ぎ225 million and ?ぎ17 million over violations related to WhatsApp and a data leak, respectively.

The introduction of paid versions of Facebook and Instagram could potentially address some of the concerns raised by EU regulators, even if only a small percentage of users choose to subscribe to the paid services. By offering an opt-out option for ad-based services while still providing access to a paid version, Meta hopes to alleviate regulatory concerns. Meta has not launched its new app Threads, a competitor to Twitter, in Europe due to regulatory concerns.

Europe is the second most profitable region for Meta after North America, with the company's Chief Financial Officer, Susan Li, stating that EU advertising represents 10% of Meta's overall business. Meta generated nearly $117 billion in revenue in 2020. In addition to its European challenges, Meta is working to revitalize its business following a slowdown in ad sales growth and is investing in the development of artificial intelligence technologies to incorporate into its products. Mark Zuckerberg, Meta's CEO, is also driving the company's vision for the metaverse, an immersive digital world that is still in its early stages.

/ Friday, September 1, 2023, 3:06 PM /

themes:  Facebook  Mark Zuckerberg

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