Meta's ad-free subscription faces scrutiny for misleading practices

Meta's ad-free subscription service in Europe is encountering a regulatory challenge, as the Consumer Protection Cooperation Network (CPC) has issued a notice requiring the company to explain and potentially revise its marketing of the service, claiming it is currently misleading.

Last November, the platform introduced its ad-free subscription package in Europe, allowing EU users to pay a monthly fee to opt out of both ads and data tracking, in compliance with new EU permission requirements. The intention behind this option is for Meta to adhere to the new regulations while still preserving its revenue stream.

However, after an investigation, the EU Commission ruled out earlier this month that Meta’s ad-free subscription plan does not comply with the Digital Markets Act (DMA) and has given the company a chance to respond before potentially facing fines.

Now, the CPC, through a separate investigation, has found that the platform's ad-free package lacks clarity in explaining the process to users. According to the finding, the consumer protection authorities assessed several elements that could constitute misleading or aggressive practices, in particular, whether Meta provided consumers upfront with true, clear and sufficient information.

They analysed whether this information allowed consumers to understand the implications of their decision to pay or to accept the processing of their personal data for commercial purposes on their rights as consumers. In addition, CPC authorities are concerned that many consumers might have been exposed to undue pressure to choose rapidly between the two models, fearing that they would instantly lose access to their accounts and network of contacts.

The CPC believes that Meta’s ad-free offering uses misleading language, putting undue pressure on users to decide whether to subscribe, while also making the overall documentation around the package confusing.

It notes the pressures on consumers who have used Facebook and Instagram free of charge until the new business model was introduced, and for whom these platforms constitute a significant part of their social lives and interactions, to make an immediate choice, without giving them a "pre-warning, sufficient time, and a real opportunity to assess how that choice might affect their contractual relationship with Meta, by not letting them access their accounts before making their choice.”

As a result, Meta has already offered to halve the price of its ad-free package to appease EU regulators. However, this presents another challenge for Meta in the EU, potentially leading to changes in what it can offer. The platform has until September 1, 2024, to respond to the CPC’s notice.