Meta may face daily fines over pay-or-consent model, EU warns

By Foo Yun Chee

BRUSSELS (Reuters) -Meta Platforms may face daily fines if EU regulators decide the changes it has proposed to its pay-or-consent model fail to comply with an antitrust order issued in April, they said on Friday.

The warning from the European Commission, which acts as the EU competition enforcer, came two months after it slapped a 200-million-euro ($234 million) fine on the U.S. social media giant for breaching the Digital Markets Act (DMA) aiming at curbing the power of Big Tech.

The move shows the Commission's continuing crackdown against Big Tech and its push to create a level playing field for smaller rivals despite U.S. criticism about the bloc's rules mainly targeting its companies.

Daily fines for not complying with the DMA can be as much as 5% of a company's average daily worldwide turnover.

The EU executive said Meta's pay-or-consent model introduced in November 2023 breached the DMA in the period up to November 2024, when it tweaked it to use less personal data for targeted advertising. The Commission has been scrutinising the changes since then.

The model gives Facebook and Instagram users who consent to be tracked a free service that is funded by advertising revenues. Alternatively, they can pay for an ad-free service.

The EU competition watchdog said Meta will only make limited changes to its pay-or-consent model rolled out last November.

"The Commission cannot confirm at this stage if these are sufficient to comply with the main parameters of compliance outlined in its non-compliance Decision," a spokesperson said.

"With this in mind, we will consider the next steps, including recalling that continuous non-compliance could entail the application of periodic penalty payments running as of 27 June 2025, as indicated in the non-compliance decision."

Meta accused the Commission of discriminating against the company and for moving the goalposts during discussions over the last two months.

"A user choice between a subscription for no ads service or a free ad supported service remains a legitimate business model for every company in Europe - except Meta," a Meta spokesperson said.

"We are confident that the range of choices we offer people in the EU doesn't just comply with what the EU's rules require - it goes well beyond them."

"At a time when there are growing voices across Europe to change direction and focus on innovation and growth, this signals that the EU remains closed for business."

($1 = 0.8539 euros)

(Reporting by Foo Yun Chee. Editing by Jane Merriman and Elaine Hardcastle)