EU consumer advocates examine pay-as-you-go model

European consumer protection authorities are taking a closer look at the introduction of a new payment model at US internet company Meta. The authorities believe that Meta may not have informed its users on Facebook and Instagram truthfully, clearly and adequately about the new payment model.

The background is that Meta 2023 gave its users the option to pay for Facebook and Instagram or agree to have their data used for personalized ads, as announced by the European Commission.

According to the statement, the authorities are investigating, among other things, whether Meta used misleading or aggressive practices. Consumers may have faced undue pressure “to quickly choose between the two models for fear of immediately losing access to their accounts and communications network.” It is also questionable whether consumers were able to understand how their decision would affect their rights from the information provided.

The consumer protection authorities sent their concerns to Meta in a letter via the so-called Consumer Protection Cooperation Network (CPC Network). The European Commission coordinates work in such cross-border cases. The European consumer protection organization Beuc welcomed the authorities’ action.

The EU Commission included four points in its letter with examples. Accordingly, users could be misled by the word “free,” even though Meta uses their data for personalized ads and thus makes money. In addition, users could be confused by being forced to click on different windows and links to find out how Meta uses their data.

Furthermore, there may be an impression that paying customers will no longer see any ads at all, although they may encounter ads on the platforms. Users may also have been pressured by not having enough time to consider how this decision will affect their contractual relationship with Meta. They will not be given access to their accounts until they make their decision.

Meta now has until September 1 to respond to these allegations. Regardless of the letter sent now, the European Commission is currently investigating the so-called “pay or agree” model based on the EU’s new tough legislation to control big tech companies. According to the Brussels authority, among other things, it is against EU law that Facebook and Instagram users have to choose between a monthly fee and a free version with personalized ads.