Meta has warned that European users could face a “materially worse” experience on its platforms following a key ruling by the European Commission that found the company’s current data consent model in breach of the EU’s new Digital Markets Act (DMA).
The tech giant, which owns Facebook, Instagram, and WhatsApp, introduced a “consent or pay” system that offers users a choice: either pay a monthly subscription for an ad-free experience or allow Meta to use their personal data for targeted advertising. However, the European Commission ruled last week that the model does not allow for genuine consent and fined Meta €200 million for non-compliance with the DMA.
In its latest earnings report, Meta acknowledged the regulatory pressure and said it would need to make modifications to its model based on EU feedback. These changes, it warned, could lead to a “significantly worse user experience” for its European customers and impact its business and advertising revenues in the region, potentially as soon as the third quarter of this year.
While the ruling applies only within the EU, Meta is currently in discussions with the UK’s Information Commissioner’s Office (ICO) about introducing a similar model for British users. Meta has not yet implemented the ad-free subscription in the UK.
A Meta spokesperson said the company was working with UK regulators to meet compliance expectations while supporting economic growth. “Personalised advertising on our platforms drives over £19.5 billion in revenues for UK businesses every year,” the company said.
Analyst Eric Seufert suggested Meta may be trying to rally public support in Europe by highlighting the potential degradation of its services. “They want to turn public opinion against this regulatory regime,” he told the BBC.
The European Commission maintains that the “consent or pay” model, as currently implemented, fails to give users a real choice about how their personal data is used. It is also reviewing an alternative ad model introduced by Meta last year that the company claims uses less personal data.
Meta has been given 60 days to comply with the DMA ruling or face additional fines. The decision comes amid broader regulatory scrutiny of big tech in Europe. Last week, Apple was fined €500 million over its App Store practices.
Despite the regulatory headwinds, Meta’s latest financial results exceeded Wall Street expectations, with strong advertising revenue and a 6% increase in daily active users. CEO Mark Zuckerberg touted progress on artificial intelligence tools, noting that Meta AI now reaches nearly 1 billion monthly users.
The company also defended its recent rollout of the Meta AI chatbot, which drew criticism from WhatsApp users in Europe who were unable to disable the new feature. Meta described it as “optional” and said it would continue to listen to user feedback.
