Meta Platforms Reduces Monthly Subscription Cost in the Face of Regulatory Review

By Consultants Review Team Wednesday, 20 March 2024

According to a senior Meta executive, Meta Platforms (META.O) has announced a major drop in its monthly Facebook and Instagram subscription charge, which will be reduced from 9.99 euros to 5.99 euros. This decision comes amid increasing pressure from privacy and antitrust regulators, with the goal of assuaging diverse stakeholders' worries.

The move to reduce costs derives from growing criticism of Meta's ad-free membership service in Europe, which opponents accuse of effectively charging users for privacy protection.

This subscription service, launched in November to comply with the Digital Markets Act (DMA), was a response to constraints on Meta's ability to tailor advertising without explicit user consent, which had an impact on its principal revenue stream.

Tim Lamb, Meta's lawyer, explained the rationale for the pricing modification during a European Commission hearing., "We have intended to speed that process for a while because we need to get to a steady state... therefore we have offered to decrease the price from 9.99 to 5.99 for a single account and 4 euros for any additional accounts."

Lamb emphasized, "That is by far the lowest end of the spectrum that any reasonable individual should pay for services of this caliber. And I believe that is a serious offer. The regulatory uncertainty is now present and has to be resolved as soon as possible."


However, Austrian privacy activist Max Schrems contended that the core issue extends beyond the fee itself. "We know from all research that even a fee of just 1.99 euros or less leads to a shift in consent from 3-10% who genuinely want advertisements to 99.9% who still click yes," he said, referring to GDPR, the EU's privacy legislation.

"In reality, it isn't about the money; it's about the overall 'pay or okay' mindset. The entire point of 'pay or okay' is to persuade consumers to click okay, even if it is not a free and real option. We do not believe that simply changing the amount makes this technique legitimate.

The continuing hearing allows Meta's users and third parties to seek clarification on its compliance with the DMA. Meta already made the reduced subscription cost offer to regulators early this year and is currently in talks with data protection authorities, specifically the Irish agency.

Under Meta's revamped strategy, users who agree to tracking will continue to receive a free service funded by advertising income. However, corporations who violate the DMA risk being fined up to 10% of their yearly global turnover. 

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