EU is now looking at Meta’s Pay-or-Okay scheme

The European Union has now asked Meta for more information about the tech firm’s Pay-or-Okay scheme, under which European users are forced to pay up if they do not want their data to be used or sold.

Meta switched to the controversial system after the European Court of Justice (CJEU) declared the company’s handling of user data – selling it as the main source of profit for the firm – illegal in July 2023 (PDF).

However, the policy has already been heavily criticized by activists in Europe who say this is a workaround that has allowed Meta to keep bypassing the General Data Protection Regulation, the EU’s tough privacy and security law.

That’s because the company is choosing to charge users a fee for refusing its tracking for personalized ads rather than simply asking them for yes/no consent. Around 30 activist groups have recently urged the European Data Protection Board (EDPB) to officially voice opposition to the policy in an open letter.

The EDPB, which consists of data protection agencies from EU countries as well as Norway, Iceland, and Liechtenstein, needs to determine by the end of March whether to object to Meta’s policies.

Official European Union institutions are now making their move, too. The European Commission said in a press release that it has sent Meta a formal request for information (RFI) under the Digital Services Act (DSA) and asked the company to provide more information about the policy.

“In particular, Meta should provide additional information on the measures it has taken to comply with its obligations concerning Facebook and Instagram's advertising practices, recommender systems, and risk assessments related to the introduction of that subscription option,” said the Commission.

To critics, the way that Meta is presenting users of its platforms with a choice seems fishy – people either have to agree to be tracked or need to pay monthly subscription fees starting at €9.99 ($10.84).

This means that there is currently no way for Facebook, Instagram, or WhatsApp users in EU member states to access these platforms for free and without being tracked.

The EU has a powerful tool, though – at least on paper. The pan-European DSA rules apply to all platforms and their “algorithmic accountability and transparency” as of February 17th, 2024.

This is relevant because the DSA says that large platforms must obtain consent from people in order to use their data for advertising. Consent must also comply with the EU’s data protection rules and should be as easy to withdraw as it is to provide.