Meta’s New Ad-Free Subscriptions Are Already Under Legal Attack from Privacy Activists

Posted on Dec 6, 2023 by Glyn Moody

Back in August we wrote about Meta’s surprise announcement that it would seek consent from users in the EU, EEA, and Switzerland before showing them behavioral advertisements. A few weeks ago, Meta provided more details of the proposed change. It turned out that users would be required to pay a substantial subscription fee – €120 (about $130) a year on the web, or €156 (about $170) a year on iOS and Android – to remove ads.

At the time, the privacy activist Max Schrems said that his organization “would fight this up and down the courts” because this approach “would mean only the rich can enjoy these rights, at a time when many people are struggling to make ends meet.” Schrems has now made good on that promise:

noyb filed a complaint against Meta with the Austrian data protection authority. European users now have the “choice” to either consent to being tracked for personalized advertising – or pay up to €251.88 a year to retain their fundamental right to data protection on Instagram and Facebook. Not only is the cost unacceptable, but industry numbers suggest that only 3 percent of people want to be tracked – while more than 99 percent decide against a payment when faced with a “privacy fee.”

Under the EU’s GDPR, consent to online tracking and behavioral ads is valid only if it is “freely given.” According to Schrems, that is not the case with Meta’s new payment option because anyone who refuses to give their consent is forced to pay a hefty “privacy fee” of around $275. The post on the site points out that according to Meta’s earning presentation for the third quarter of 2023, the average quarterly revenue per user in Europe between Q3 2022 and Q3 2023 was $16.79. This equates to an annual revenue of around $67 per user, which makes the proposed “privacy fee” disproportionately high, increasing the pressure on users to agree to being tracked.

The noyb post makes another important point: if Meta is permitted to charge his kind of fee, other social media companies might see it as permission to do the same. According to noyb’s calculations:

If Meta is successful in defending this new approach, it is likely to set off a domino effect. Already now, TikTok is reportedly testing an ad-free subscription outside the US. Other app providers could follow in the near future, making online privacy unaffordable. According to Google, the average person has 35 apps installed on their smartphone. If all of these apps followed Meta’s lead and charged a similar fee, people would have to pay a “fundamental rights fee” of €8,815.80 a year. For a family of four, the price of data privacy would rise to €35,263.20 per year – more than the average full-time income in the EU.

That €35,263.20 per year for a family of four – around $38,000 – may be something of an exaggeration, but the point remains: if Meta is permitted to do this, others are likely to follow suit. Schrems is not the only one concerned about the impact of Meta’s new fee on privacy and on consumers. Before noyb’s legal action against Meta was filed, Norway’s data protection regulator said that it was “looking into” bringing its own case against the company. According to Wired, the concern in Norway is that if they pay, users won’t see behavioral ads, but that “Meta will still track you, they will still collect the data.”

That’s also a point that BEUC, the European umbrella group for 45 independent consumer organisations from 31 countries, is worried about. The organization has announced that it has filed its own complaint against Meta with a network of European consumer protection authorities, alleging that that the company is engaging in “unfair commercial practices in multiple ways.” In addition, BEUC says it is “also assessing whether Meta is infringing data protection law (the GDPR).” BEUC identifies four main issues. It claims:

  • Meta pushes consumers into making a choice they might not want to make, which constitutes an “aggressive practice” under EU law
  • Paying for a subscription may stop the ads appearing, but users are likely to continue to have their personal data collected and used, but for other purposes
  • Meta is misleading consumers, because the “free”option is not free: consumers pay Meta through the provision of their data, as past court rulings have already declared
  • Consumers do not have a real choice because if they quit the services they would lose all their contacts and interactions built over the years – the network effects are very strong

In addition, like noyb, BEUC points out that the “privacy fee” is “very high,” which is likely to act as a deterrent for many people. As a result, they do not have a real choice.

It’s interesting that Meta’s new ad-free subscriptions have come under attack so quickly and from a variety of organizations. Meta was presumably expecting this, not least because Schrems gave a clear warning of his intent. The company doubtless intends to contest the complaints, and continue with its well-established approach of trying to drag things out through repeated appeals against any rulings that go against it. Given the size of the daily profits Meta derives from its services based on constant online surveillance, it makes business sense to concede nothing, to fight everything in the courts, and to pay the occasional fine a few years later. But from a privacy point of view, it is deeply contemptuous of its users and their rights.

Featured image by Georg Molterer.