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Title: Meta cuts the price of its ad-free plan by 40 percent in a bid to sate
EU regulators

Date: Tue, 12 Nov 2024 17:49:26 +0000
Link: https://www.engadget.com/big-tech/meta-cuts-t...

Meta has long been at loggerheads with European Union officials over its
approach to targeted Facebook and Instagram ads. The company is hoping to
placate regulators with some changes to its ad model in the bloc, which
includes lowering the price of its ad-free subscription. Starting November
13, the plan will cost 40 percent less ΓÇö Γé¼6 ($6.36) per month for signups
via the web and Γé¼8 ($8.48) for those who subscribe on an iOS or Android
device. The fee for each additional Facebook and Instagram account is Γé¼4
per month on the web and Γé¼5 via mobile.

The company will automatically drop current subscribers down to the lower
pricing. It says that it will once again ask users in the bloc if they'd like
to sign up.

When they see this prompt (which can only be ignored for a certain period of
time), there will be a third option for EU Facebook and Instagram users to
choose from. Those who don't want to pay for a subscription can instead opt
to only view ads that are based on what they see in a given session in the
apps. Meta will also factor in a few key data markers such as "a personΓÇÖs
age, location, gender and how a person engages with ads."

These less-personalized ads naturally won't be as tailored to a given user's
interests, the company notes. As such, people are perhaps less likely to
click on such ads. To make up for that (and make sure this option doesn't hit
Meta in the pocket too hard), folks who choose the less-personalized ads
option will sometimes encounter unskippable ads. According to The Wall Street
Journal, these will be displayed full screen.

"Such ad breaks are common across other services, and are already offered by
many of our competitors," Meta argues. "This change will help us continue to
provide value to advertisers which ensures we can offer people a less
personalized ads experience at no charge."

Targeted ads are Meta's biggest revenue driver, but EU officials have
reportedly been pressuring the company to offer a free, less-personalized
option in its apps. Meta has argued that would negatively impact its bottom
line. Although it has seemingly caved to officials' requests, the unskippable
ad aspect may be construed as malicious compliance, as it worsens the user
experience.

Meta claims that these changes to its ad model "meet EU regulator demands and
go beyond whatΓÇÖs required" by the bloc's laws. The company introduced its
ad-free subscription 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. It was previously ordered to seek permission from
users in the bloc before showing them personalized ads.

The EU didn't take too kindly to the paid ad-free approach, however. An
investigation into the "consent or pay" model is ongoing. In July, the EU
said that in its preliminary findings, Meta was violating the DMA with this
plan.

These latest changes are said to be Meta's attempt to settle the case, but
according to the Journal, the EU's discussions with the company haven't
concluded. The bloc's regulatory body has until late March to finish its
investigation and make a final decision. If it determines that Meta has
indeed violated the DMA, the company could be on the hook for a fine of up to
10 percent of its annual global revenue. Based on its total revenue for 2023,
it could have to pay up as much as $13 billion or so.

This article originally appeared on Engadget at https://www.engadget.com/big-
tech/meta-cuts-the-price-of-its-ad-free-plan-by-40-percent-in-a-bid-to-sate-
eu-regulators-174926790.html?src=rss

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