Meta has long been at odds with European Union officials over its approach to targeted advertising on Facebook and Instagram. The company is hoping to appease regulators by making some changes to its advertising model on the blockchain, which include lowering the price of its ad-free subscription. Starting November 13, the plan will cost 40% less – 6 euros ($6.36) per month for those who sign up online and 8 euros ($8.48) for those who sign up on iOS or Android devices. The fee for each additional Facebook and Instagram account is 4 euros per month online and 5 euros via mobile devices.
The company will automatically transfer current subscribers to lower rates. The post says it will ask users once again in the block if they want to subscribe.
When they see this request (which can only be ignored for a certain period of time), Facebook and Instagram users from the EU will be offered a third option to choose from. Those who don’t want to pay for a subscription can instead choose to see only those ads that are based on what they see during a particular session on the apps. The goal will also take into account several key data markers, such as “age, location, gender, and how a person interacts with the ads.”
These less personalized ads will naturally not be as tailored to the interests of a particular user, the company says. Thus, people may be less likely to click on such ads. To compensate for this (and to make sure that this option doesn’t hit Meta’s pocketbook too hard), people who opt for less personalized ads sometimes encounter ads that are unmissable. According to The Wall Street Journal, these will be displayed full screen.
“These ad breaks are common in other services and are already offered by many of our competitors,” says Meta. “This change will help us continue to provide value to advertisers, ensuring that we can offer less personalized ads to people for free.”
Targeted advertising is Meta’s largest source of revenue, but EU officials are reportedly putting pressure on the company to offer a free, less personalized option in its apps. Meta claims that this will negatively impact its profits. While the company has seemingly caved in to the officials’ demands, the can’t-miss aspect of the ads could be interpreted as malicious compliance as it degrades the user experience.
Meta argues that these changes to the advertising model are “in line with the requirements of the EU regulator and go beyond what is required” by the bloc’s laws. The company introduced ad-free subscriptions a year ago to comply with laws such as the Digital Markets Act (DMA) as well as stricter interpretations of the General Data Protection Regulation. Previously, it was mandated to ask permission from blockchain users before showing them personalized ads.
However, the EU has not been too favorable to the paid approach without ads. The investigation into the “consent or pay” model is ongoing. In July, the EU said that its preliminary findings suggest that Meta is in breach of the DMA with this plan.
These latest changes are believed to be an attempt by Meta to settle the case, but according to the newspaper, the EU’s negotiations with the company have not yet concluded. The bloc’s regulatory authority has until the end of March to complete its investigation and make a final decision. If it determines that Meta did violate the DMA, the company could be fined up to 10 percent of its annual global revenue. Based on its total revenue for 2023, it would have to pay about $13 billion.
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