Meta Considers Paid Versions of Facebook and Instagram Without Ads for EU Users
Meta, the parent company of Facebook and Instagram, is reportedly considering offering paid versions of the popular social media platforms in the European Union (EU) that would be ad-free. The move comes as a response to increasing regulatory scrutiny and a recognition that government policies may result in divergent user experiences between the United States and Europe.
According to three insiders with knowledge of the matter, users who opt for the paid subscription would be able to enjoy Facebook and Instagram without advertisements, a feature that could help Meta address privacy concerns and regulatory scrutiny from EU authorities. The company’s current ad-based services rely heavily on analyzing user data.
While the details about the cost and rollout date of the paid versions are still unknown, Meta intends to continue offering free versions of Facebook and Instagram with ads in the European Union, offering users a choice between the two options.
A spokesperson for Meta declined to comment on the rumors.
For almost two decades, Meta has provided free social networking services while generating revenue from advertising. The introduction of paid tiers reflects the increasing need for companies to adapt their products to comply with data privacy regulations and government policies, especially in Europe.
The EU’s highest court recently ruled that Meta cannot combine user data collected from its various platforms, including Facebook, Instagram, and WhatsApp, without explicit consent from users. In addition, the Irish regulators fined the company €390 million earlier this year for coercing users into accepting personalized ads as a condition of using Facebook.
These rulings stem from the implementation of Europe’s General Data Protection Regulation (GDPR) in 2018, a landmark legislation aimed at safeguarding individuals’ online data.
The willingness of Meta to explore paid subscription options highlights how European Union citizens, comprising approximately 450 million people across 27 countries, may start experiencing different versions of consumer technology products due to new laws, regulations, and court decisions.
Recent changes in EU laws, such as the Digital Services Act, which aims to combat illicit content online, have allowed TikTok and Instagram users in the region to block their personal data from being employed for personalized social media feeds. Snapchat and Meta have also refrained from targeting teenagers aged 13 to 17 in Europe with personalized ads.
The Digital Markets Act, another EU legislation set to take effect next year, will compel major tech platforms to alter certain business practices to foster competition. In response, Apple is expected to permit European Union users to download alternatives to the App Store on iPhones and iPads for the first time.
Anu Bradford, a law professor at Columbia University and the author of “Digital Empires: The Global Battle to Regulate Technology,” views these developments as a demonstration of tech companies’ compliance with the EU’s digital regulations, indicating that such companies remain subject to governmental authorities.
Meta, which also owns Messenger, has been subjected to particular scrutiny by EU regulators. In May, the company was fined €1.2 billion for violating privacy laws by transferring data on European citizens to U.S. servers to improve its advertising technology. Meta has appealed the ruling.
The company has also faced fines for other GDPR violations such as a €265 million penalty for a 2021 data breach. Additionally, Irish regulators imposed fines of €225 million related to WhatsApp violations and €17 million over a data leak.
According to two insiders, some employees within Meta believe that giving users the option to opt out of ad-based services while still accessing a paid version of Facebook or Instagram could address concerns raised by European regulators. Even if the uptake of the paid version is minimal, offering such an alternative could serve Meta’s interests in the region.
Due to regulatory concerns, Meta has not released its new app, Threads, in Europe. Despite these challenges, Europe is the second most profitable region for Meta after North America, with its advertising activities in the EU accounting for 10% of the company’s overall business. Meta reported nearly $117 billion in revenue last year.
Apart from its European issues, Meta is striving to revitalize its business following a slump in ad sales growth caused by global economic uncertainties. Additionally, the company remains committed to its vision of the metaverse, an immersive digital world, championed by CEO Mark Zuckerberg. Executives are also focused on developing and incorporating artificial intelligence technologies into more of Meta’s products.
In light of the ever-changing landscape of data privacy and government policies, Meta’s consideration of paid versions of Facebook and Instagram represents an attempt to provide users with options while navigating the complex regulatory environment in the European Union.