Meta’s attempt at a new monetisation model has been quashed in the European Union, after the European Union’s highest court found Meta’s ad-free subscription model has no legal basis for tracking users across services and third-party sites without express consent.
Privacy advocates then pointed out a binary “yes or no” choice wasn’t true consent, as the only alternative is paying a monthly subscription fee.
EDPB weighs in
Today, the European Data Protection Board (EDPB) decided they agreed.
“In most cases, it will not be possible for large online platforms to comply with the requirements for valid consent if they confront users only with a binary choice between consenting to processing of personal data for behavioural advertising purposes and paying a fee,” the published opinion report stated.
“The offering of (only) a paid alternative to the service which includes processing for behavioural advertising purposes should not be the default way forward for controllers.
“When developing the alternative to the version of the service with behavioural advertising, large online platforms should consider providing data subjects with an ‘equivalent alternative’ that does not entail the payment of a fee.”
The EDPB’s definition of freely given consent is extensive, but boils down to several core factors:
Will the subject suffer detrimental consequences for not consenting or withdrawing consent?
- Is there an imbalance of power between the data subject and the company?
- Is consent required to access goods and services, even though the processing based on consent is not necessary for the contracted offer of such goods or services?
- Is a fee imposed to influence the subject’s decision making or nudge them towards a choice?
- Is the subject forced to consent to a bundle of services, rather than choose which individual services they are consenting to?
If the answer to these questions is yes, the EDPB does not consider it to be “freely given consent”.
The Court of Justice of the European Union (CJEU) will now need to make a ruling based on the advice it has received.
Activist drives legal challenges
Austrian activist lawyer Max Schrems has been at war with Meta for the last 13 years over its data privacy and monetisation models, successfully bloodying the social media giant’s nose in multiple court rooms with cases worth billions of dollars.
Schrems released his own opinion on the EDPB finding, stating “Meta is out of options in the EU”.
"We welcome that the EDPB has started a more nuanced discussion on 'pay or okay' and at least clarified that large platforms cannot use 'pay or okay',” Schrems continued.
“However, we are concerned that today's first opinion is rather cautious and was based on limited facts.
“Once all the facts are on the table, we are confident that 'Pay or Okay' will be declared unlawful across the board.
“We know that 'Pay or Okay' shifts consent rates from about 3% to more than 99% - so it is as far from 'freely given' consent as North Korea is from a democracy.
“It is crucial to get all the relevant numbers for further decisions beyond Meta and larger platforms."
The EU is also investigating Meta’s ad-free subscription model alongside Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOGL) in a separate probe.
The tech giants are being scrutinised for fees and self-preferencing under the Digital Markets Act, which went into effect in March.
Under the law, the EU can fine a company up to 10% of its total annual revenue, and up to 20% for repeated violations.
Meta is yet to release a statement on the EDPB’s opinion report.