Users of Facebook and Instagram might be offered a paid-for version if they want to ditch advertisements. Mother company Meta is considering that option due to European Union legislation policies and recent court rulings.
For years, the EU regulators and Meta have been battling over privacy issues for its users and it is felt a subscription model might be the answer.
It would mean people could choose between a free version, where user-information is collected and analysed, and a pay-for version without such data collection, the New York Times reports.
It is unclear what the cost of such an option might be for users.
Changing Meta’s business model comes amid increasing European pressure.
In July, the EU’s highest court prohibited Meta from aggregating information gathered from users throughout its platforms, including Facebook, Instagram, and WhatsApp, as well as from third-party websites and apps, until users give specific consent.
In January, Irish regulators fined the US tech giant €390 million for forcing users to accept personalised ads as a requirement of using Facebook. In May, Messenger, also a Meta owned platform, was fined €1.2 billion for violating privacy laws by sending data on European citizens back to US servers for the purposes of improving the company’s advertising technology.
The latest situation came about as part of Europe’s General Data Protection Regulation, or GDPR, which was ground-breaking legislation designed to protect people’s online data and which was enacted in 2018.
Alongside that, the recently deployed Digital Service Act (DSA) contains a number of rules and regulations set up to “create a safer digital space where the fundamental rights of users are protected and to establish a level playing field for businesses”.
A key element is the concept of so-called “very large online platforms” (VLOP) and search engines – online services with more than 45 million users in the EU. They must comply with the most stringent DSA rules or risk facing a variety of penalties such as fines of up to 6 per cent of their global revenue.
As of August 25, the first 17 organisations determined as VLOPs are officially subject to the regulations. Social media users in Europe can now choose to block personal data from being used to generate their online feeds.
Snapchat and Meta have stopped marketers from targeting teenagers aged 13 to 17 in Europe with personalised ads.
Another EU tech-focused law, the Digital Markets Act, will come into effect next year. This is anticipated to drive VLOPs to adjust significant business policies to stimulate competition, with Apple already allowing customers in the EU to use alternatives to the App Store on iPhones and iPads for the first time.
Due to regulatory concerns, Meta has so far not released its new programme Threads, which is a competitor to X, formerly known as Twitter, in Europe.
After North America, Europe is Meta’s second-most profitable region. Meta’s chief financial officer Susan Li stated in April that advertising in the EU accounted for 10 per cent of the company’s total revenue. Last year, Meta’s sales were valued at more than $117 billion.
Meta, the owner of Facebook and Instagram, has announced changes to its social media platforms in response to new European Union censorship laws coming into force. https://t.co/P93ZmsvM6r
— Brussels Signal (@brusselssignal) August 23, 2023