The EU is set to charge Facebook’s parent Meta (NASDAQ:META) with breaking the bloc’s landmark digital rules, the Financial Times reported on Monday.
In March, the European Commission launched a non-compliance probe against Apple (AAPL), Alphabet’s (GOOGL) (GOOG) Google and Meta Platforms (META) for potential violations under the Digital Markets Act.
In Meta’s (META) case, the non-compliance investigations were related to the social network’s “pay or consent model.”
In preliminary findings to be issued this week, regulators will say that they are worried about Meta’s “pay or consent” model, the FT report said, citing three people with direct knowledge of the matter.
Meta (META) introduced a no-ads subscription service for Facebook and Instagram in Europe late last year to comply with the evolving European regulations, enabling users to opt out of the company’s data tracking for advertising purposes. Meanwhile, users who consent to be tracked get a free service.
The regulators are expected to say that the choice presented by Meta’s model risks giving consumers a false alternative, with the financial barrier potentially forcing them to consent to their personal data being tracked for advertising purposes, according to the FT report.
If found in breach of the act, Meta (META) faces hefty penalties of up to 10% of its global turnover, and up to 20% for any repeat offense, the report concluded.
The report comes after EU antitrust regulators last week pressed a similar case against Apple (AAPL). The European Commission said that Apple’s App Store rules breach the DMA as they prevent app developers from steering consumers to alternative channels for offers and content.