Mark Zuckerberg's Meta just got some bad news in the European Union.
The European Commission, the EU's executive arm, on Monday announced its preliminary findings that Meta's "pay or consent" advertising model is in breach of the bloc's Digital Markets Act.
Meta introduced the model in the EU in 2023 after European regulators had ruled in 2022 that Meta must let users opt out of personalized ads based on their activity on its social platforms. The model requires users to pay a monthly fee to avoid seeing ads on Facebook and Instagram or receive personalized ads to continue using a free version.
On Monday, the EU regulators said: "In the Commission's preliminary view, this binary choice forces users to consent to the combination of their personal data and fails to provide them a less personalised but equivalent version of Meta's social networks," the commission said Monday.
Meta now has the chance to respond in writing to the preliminary findings. The commission will wrap up its investigation within 12 months from when it began on March 25.
If Meta is ultimately found to be non-compliant by the regulator, it could face fines of up to 10% of its global revenue.
A Meta spokesperson said: "Subscription for no ads follows the direction of the highest court in Europe and complies with the DMA. We look forward to further constructive dialogue with the European Commission to bring this investigation to a close."
Last year, Meta also came under regulatory scrutiny in the EU when it was hit with a $1.3 billion fine for transferring Facebook users' data to the US.
Meta isn't the first tech giant to be accused of violating the DMA, which took effect in March.
The European Commission recently informed Apple of its preliminary findings that the company's App Store rules violate the DMA because "they prevent app developers from freely steering consumers to alternative channels for offers and content."
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