The move, as reported by the Financial Times, aims to comply with new EU rules that require companies to obtain explicit consent from users before showing them personalised ads, the key revenue source for Meta
Meta, the parent company of social media giants Facebook and Instagram, is reportedly preparing to introduce a new subscription-based model for users in the European Union (EU) in response to stringent new data privacy regulations. The move, as reported by the Financial Times, aims to comply with new EU rules that require companies to obtain explicit consent from users before showing them personalised ads, the key revenue source for Meta.
Under this plan, European users would have the option to pay for an ad-free experience on Facebook and Instagram or continue using the platforms with targeted advertisements as before. Users who opt for the ad-free version would be charged around €10 per month when using desktop browsers. Extra accounts would cost around €6 each. On mobile devices, the subscription fee would be higher, around €13 per month, due to commissions charged by app stores like Apple and Google on in-app payments.
The subscription model, called “Subscription No Ads” or SNA, would provide a clear choice for users. However, it is unclear whether EU regulators will approve the plan or mandate a more affordable price. Regulators are concerned that the proposed fees may be too expensive for users who prefer not to be targeted by ads. The company management is actively meeting with privacy regulators in Ireland, where its EU regional HQ is based, as well as with EU officials in Brussels to discuss the new subscription plan.
Impact of EU Regulations
The EU has recently implemented a series of regulations aimed at curbing the power of big tech companies, particularly with regard to the use of personal data for targeted advertising. The Digital Markets Act, which takes effect in March, imposes new obligations on companies to share data with rivals to promote fair competition. Meanwhile, the Data Governance Act encourages data sharing between companies across sectors.
This move by Meta comes after a July decision by the European Court of Justice, which ruled that Meta must obtain user consent before displaying ads. This ruling hampered Meta’s ability to generate revenue by tailoring ads for users based on their online behaviour. Some critics have expressed concerns about the subscription model, arguing that it could lead to a situation where privacy and digital rights are treated as commodities for sale, excluding those who cannot afford to pay and making these rights exclusive to the rich.
It remains to be seen whether the proposed subscription model will satisfy regulators and users and how it will impact the EU’s digital sector. The outcome of these discussions will be closely watched by tech companies and users across the world alike, as it could set a precedent for future data privacy regulations and business models in the tech sector.