NEWS  News  November 28, 2023  Reading time: 3 Minute(s)

Max (RS editor)

Meta, the parent company of Facebook and Instagram, is facing a significant privacy challenge in the European Union (EU) over its newly introduced ad-free subscription service. The company's attempt to navigate EU privacy regulations by offering users a choice between paying a monthly subscription fee for ad-free access or surrendering their privacy for free access has sparked a complaint from the privacy rights group Noyb in Austria.

The 'Pay or Okay' Tactic

Meta's ad-free subscription, priced at €9.99/month on the web or €12.99/month on iOS or Android per linked Facebook and Instagram account, prompted Noyb to question the proportionality of the cost. The privacy rights group argues that Meta's subscription fees far exceed the value the company derives from tracking users in the region. According to Noyb, the average revenue per user in Europe between Q3 2022 and Q3 2023 was $16.79, translating to an annual revenue of €62.88 per user. In contrast, Meta's subscription sets a minimum annual cost of nearly €120, rising to over €250 for users with both Facebook and Instagram accounts.

Privacy Rights vs. Financial Strain

The complainant, represented by Noyb, is described as being in financial distress and receiving unemployment assistance. This case underscores the potential impact on individuals who may struggle to afford the cost of protecting their privacy, emphasizing the clash between financial constraints and fundamental rights. Max Schrems, founder and chairman of Noyb, highlights the broader societal implications, stating:

"For the complainant in our case, as for many others, a 'Pay or Okay' system would mean paying the rent or having privacy."

Implications for Online Privacy

Noyb contends that if other app makers adopt a similar approach, EU citizens could face a "fundamental rights fee" amounting to several thousand euros per year for an average number of apps installed on their phones. The organization warns that if Meta successfully defends this approach, it could set a precedent leading to other platforms implementing similar strategies, making online privacy financially inaccessible for many.

Legal Challenges and GDPR Compliance

The complaint filed by Noyb challenges the appropriateness of Meta's pricing strategy, suggesting that the company intentionally created a privacy-related financial burden for users. It questions whether such a high cost represents an obstacle to users freely choosing to exercise their fundamental right to privacy, as mandated by the EU's General Data Protection Regulation (GDPR).

Meta's Response and Industry Comparisons

Meta has defended its approach, citing a Court of Justice of the EU ruling related to its legal basis for processing user data for ads. The company claims that its subscription model is compliant with EU laws and highlights the option for users to purchase a subscription for an ad-free experience as a balance between regulatory requirements and user choice.

However, Noyb's challenge raises questions about the comparability of Meta's pricing with other ad-free premium subscriptions, as competitors like YouTube Premium, Spotify Premium, Netflix Standard, and Twitch Turbo do not uniformly price across the EU. Additionally, the privacy group questions the legitimacy of comparing Meta's offering with services that stream professional licensed content, given that Meta obtains content freely from users of Facebook and Instagram.

Urgency for Action

Noyb is calling for Austria's Data Protection Authority to initiate an urgency procedure to halt what it deems as Meta's illegal processing due to the severity of the violations and the high number of users affected. The group also urges the imposition of a deterrent fine to discourage other platforms from replicating Meta's pricing strategy.

As the legal battle unfolds, Meta's ad-free subscription model has become a focal point for privacy rights advocates and regulatory scrutiny. The case not only questions the company's pricing strategy but also addresses the broader issue of making fundamental rights, such as online privacy, accessible to all, irrespective of financial circumstances. The outcome of this challenge could have far-reaching implications for the intersection of privacy, user consent, and the evolving landscape of digital services in the EU.

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