Preliminary findings: the EU says Meta's pay or consent ad model breaches the DMA; Meta faces a fine of up to 10% of its global annual turnover if found guilty
Reuters Foo Yun Chee
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Discussion
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@migueldeicaza
Miguel de Icaza
on threads
The EU has legislated that companies should produce cakes that can be kept and eaten at the same time. Failure to deliver comes with a 10% global revenue hit.
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@xzed87
@xzed87
on threads
My guess is Meta will just increase ad load if you opt out. The experience will feel degraded, and many will revert back to opting in.
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@benedictevans
Benedict Evans
on threads
The important thing here is the concept that government has any role at all to play in deciding what price a private company charges for its product. That is, by default, treating this as a sort of regulated utility.
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@eric_seufert
Eric Benjamin Seufert
on threads
The EC's determination in the case of Meta's use of “pay or okay” — that a third, suboptimally-monetized version of the service be offered if advertising and subscriptions are the monetization mechanics chosen to support the business — imposes the requirement that the gatekeeper …
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@mbarczentewicz
Mikołaj Barczentewicz
on threads
In a new substack on “pay or OK,” I sketch out the options being discussed by EU officials and academics on how to assess what is an “appropriate fee” (e.g. to be charged for the “no ads” tier by Facebook). I discuss cost-plus, foregone revenue, willigness to pay, capacity to pa…
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@flasheeto
@flasheeto
on threads
1/2 🧵 Just read the EC's disappointing preliminary findings regarding Meta's ads-or-subscribe business model (which I helped design). In sports, fairness and competition are improved by creating conditions for weaker teams to improve, rather than dismantling stronger teams. …
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@benedictevans
Benedict Evans
on threads
The interesting problem is that the EU is telling Meta that it must offer a product that 1: does not use relevant ads and 2: that has an equivalent experience... B+ut a product with irrelevant ads is not equivalent to one with with relevant ads. it's worse.
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@benedictevans
Benedict Evans
on threads
So... Meta is allowed to charge, or use interest based advertising, but must also offer the product entirely for free. Why? Of course, the model the EU is objecting to here is one that's been used without controversy by a whole bunch of European newspapers for years now. Is th…
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@hotsaucechris
Chris Sarbora
on threads
I'm gonna laugh really hard if Meta decides “alright, we'll shut off Facebook and Instagram for the EU and see who feels the pressure first”
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@cwgo
Chris Go
on threads
So spotify must be charged too. Bec either you go premium without ads or free with ads...
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@mwi.invest
@mwi.invest
on threads
Meta should consider introducing those annoying unskippable ads in the EU for users who do not consent to sharing their data for personalized/targeted ads. Also, I find it ridiculous that the European Commission is against Subscription for No Ads! …
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@andrewpardoe
Andrew Pardoe
on threads
Is the EU's position really “supply Facebook without a revenue source”? This isn't my area: I have little stake in this (except for the obvious.) What incentive would Meta have to continue in the EU? Or any other ad-supported business, for that matter?
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@mbarczentewicz
Mikołaj Barczentewicz
on threads
I agree with you. I also think that the public utility model is not workable for digital services. It's an interesting situation to observe because privacy authorities are (still) quite apprehensive about the consequences of this approach and seem not to want to be perceived as…
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@LukaszOlejnik@mastodon.social
Lukasz Olejnik
on mastodon
Meta claims that the “ad-free subscription” (Pay-or-Consent) model has been “approved” by the Court of Justice of the European Union (indeed ot opined on the matter). It states that this model is compatible with the DMA. An interesting case developing. Very well.
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@maik.zumstrull.net
Maik Zumstrull
on bluesky
The elephant in the room on this is that hundreds of EU based press outlets are illegally using pay-or-accept on their websites. — By citing the DMA as the issue, and not the more appropriate GDPR, they can avoid enforcing the law against their client media - which aren't DMA g…
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@id_aa_carmack
John Carmack
on x
@TimSweeneyEpic ... That is an anti-consumer-liberty position that I can't get behind. The condescension that the little people can't possibly understand what they are trading, so the government must remove the choice from them, should grate.
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@timsweeneyepic
Tim Sweeney
on x
I think the EU ruling on Meta is sound, at least because Meta is using the fee (which they don't WANT users to pay) to coerce users into sharing massive amounts of personal data. Law shouldn't treat personal data and money as interchangeable.
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@timsweeneyepic
Tim Sweeney
on x
@Florian4Gamers ... I support Facebook's right to charge everyone a fee if they choose, and so does the DMA law. It's the hand-over-your-data-or-a-kidney gambit that's being challenged. There are certain bargains that companies must not be allowed to enter into, even with willing…
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@profthomlambert
Thom Lambert
on x
This is nuts. Who is ever going to create an offering if they can collect no value from it? It's no wonder Europe has no tech industry.
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@timsweeneyepic
Tim Sweeney
on x
Imagine if Facebook required users to either pay $10/month, hand over their personal data, or give them a kidney. Is that reasonable? What's the fundamental difference in one's rights with respect to the most intimate details of their lives and a body part?
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@timsweeneyepic
Tim Sweeney
on x
Money is interchangeable with ordinary products and services like hamburgers and haircuts because such a transaction doesn't have a sweeping long term impact on the buyer's rights. Personal data, health, and fundamental rights aren't interchangeable in this way.
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@rao_hacker_one
Arun Rao
on x
This is why many are advocating for tech companies to abandon the EU. “Give us your digital products for free, or at a vastly lowered price” isn't a viable plan for a continent. I'm fully in the “exit the EU” camp, but let's see what CEOs and boards decide over the next 2
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@jamescz19
James Czerniawski
on x
Color me shocked, shocked! This power-tripping narcissist leveraged an anti-us-tech law to punish a US tech company. This logic is absurd, and no future company understandably would want to grow and be subjected to this - it would bankrupt companies. This is about control.
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@alecstapp
Alec Stapp
on x
What if instead of just suing American tech companies they built their own [A collage of recent Reuters headlines of EU actions against Apple, Meta, Microsoft, and Nvidia]
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@eric_seufert
Eric Seufert
on x
...What the EC is saying is that firms must accept some sub-optimal profit margin in the case where users don't want 1) their data used for personalized advertising or 2) to pay for access. The EC doesn't accept that a firm dictates the terms of accessing its service; it demands…
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@thierrybreton
Thierry Breton
on x
The #DMA is here to give back 🇪🇺 users the power to decide over their #data #Meta has forced millions of users across EU into a binary choice : “pay or consent”. In our preliminary conclusion this is a breach of the DMA. Today we take an important step to ensure Meta complies. [i…
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@jason_kint
Jason Kint
on x
HUGE FT scoop on EU regulators finding that Meta is violating the new DMA (gatekeeper law) by forcing users to subscribe/pay if they don't want Meta's ubiquitous surveillance of them. Meta's comment here is deceptive based on a non-binding comment deep in a prior option. /1 [imag…
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@jason_kint
Jason Kint
on x
Great. About time. It's been 6yrs of abuses of EU law. The 2019 German cartel office decision made it clear Meta's market power made it impossible for consent to be freely given. The sub role out was another delay tactic allowed by a non binding comment made by high court.
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@tjasa_pet
@tjasa_pet
on x
Not surprisingly, Commission's preliminary findings indicate Meta's pay or consent model does not comply with Article 5(2) DMA, as it fails to provide users with a less personalised but equivalent version of Meta's social networks.
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@florian4gamers
Florian Mueller
on x
Unlike the EU, Meta can't finance its service through taxes. That's why there has to be a working revenue model, some quid pro quo between Meta and users. The DMA doesn't outlaw letting users pay for services.
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@jefflonsdale
Jeff Lonsdale
on x
The question is how long can the EU fine these global tech companies on a percentage of their global revenue without them strategizing how to exit the market. The companies won't leave all at once, first they will offer nerfed products rather than leave a hole in the market for
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@beuc
@beuc
on x
Good news the @EU_Commission is taking enforcement action based on #DMA against Meta's pay-or-consent model! It comes on top of various, recent complaints the BEUC network launched against Meta for breaches of consumer law and data protection law. ➡️ https://www.beuc.eu/...
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@vestager
Margrethe Vestager
on x
📢We informed @Meta of our preliminary finding that its “pay or consent” model fails to comply with the Digital Markets Act 👉It forces users to consent to the combination of their personal data, and fails to provide a less personalised equivalent 📰 https://www.shorturl.at/jCj8Y
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@eu_competition
@eu_competition
on x
#EUCompetition #DMA #DigitalMarketsAct Commission 🇪🇺 sends preliminary findings to Meta over its “Pay or Consent” model for breach of the Digital Markets Act 👇 🔗➡️ https://europa.eu/!yjjm9k [image]
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@eu_commission
@eu_commission
on x
The “Pay or Consent” advertising model of Meta fails to comply with the Digital Markets Act. Our preliminary findings show that this choice forces users to consent to the combination of their personal data and fails to provide them a less personalised but equivalent version of M…
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r/technology
r
on reddit
Meta accused of breaching EU antitrust rules over ad-supported subscription service