Consumer groups file complaint against Meta’s ‘pay-or-consent’ model

The European Consumer Organisation (BEUC) and 18 of its members filed a complaint to the European Commission on Thursday (30 November) against Meta’s “unfair pay-or-consent” model under EU consumer law.

This initiative comes two days after the non-profit organisation noyb, founded by Austrian activist Max Schrems, filed a complaint against Meta under the EU-wide General Data Protection Regulation (GDPR) before the Austrian data protection authority.

“The choice the tech giant is currently providing to consumers is unfair and illegal,” said Ursula Pachl, deputy director general of BEUC. The complaint was filed as part of the Consumer Protection Cooperation Network, a mechanism for dealing with cross-border consumer cases established in 2021.

BEUC’s initiative is different to noyb’s in that it filed a complaint in front of the European Commission instead of a national data protection authority and rooted its claims within a breach of EU consumer law instead of the EU data protection law.

Facebook’s famous “free and always will be” promise officially came to an end in the EU in November. Meta launched paid subscriptions for its social media Facebook and Instagram for “€9.99/month on the web or €12.99/month on iOS and Android” for EU users to choose to stop receiving targeted advertisements.

Meta’s move originates from the fact that its legal basis for processing personal data in the EU, based on the so-called ‘contract model’, was found to be in breach of Europe’s privacy framework.

Facebook, Instagram’s legal basis for personalised ads found in breach of EU law

The two decisions published on Wednesday (4 January) are a major setback for the Meta-owned social media as they risk jeopardising the company’s entire business model and come with a hefty fine.

Breaches in consumer protection law

BEUC argues that Meta’s partial blocking of its users until they have chosen an option disrespects consumer law by using an aggressive practice through “creating a sense of urgency”.

Moreover, the consumer organisation states that paid subscriptions are misleading users because they stop personalised ads but do not terminate Facebook and Instagram’s data tracking and collection, which will be used “for purposes other than ads”.

Additionally, BEUC considers that the “free” option is, in fact, not free – because Meta earns money from the data it collects on its users.

This last argument points to the market power of Facebook and Instagram services. “Consumers do not have a real choice because if they quit the services they would lose all their contacts and interactions built over the years,” the complaint argues.

BEUC’s complaint mentions that Meta’s approach “also raises concerns regarding GDPR”, especially towards the consent principle of the data protection law.

Indeed, the noyb complaint states that under EU law, consent to behavioural advertising is valid only if “freely given”, and therefore Meta has “implemented the exact opposite of a genuinely free choice”.

Considering their market power, Meta’s social media Facebook and Instagram were designated as “core platform services” by the European Commission in September under the new EU online markets antitrust regulation, the Digital Markets Act (DMA).

They now have to comply with a list of do’s and don’ts, including prohibitions concerning targeted advertisement.

WhatsApp commits to comply with EU consumer rules over policy updates

The Meta-owned messaging service agreed on Monday (6 March) to a series of commitments to settle an EU consumer probe over how it pushes out updates to its terms of services.

Previous consumer complaints

Eight members of BEUC already filed a complaint for breach of consumer law against Meta in front of the EU Commission in July 2021.

It then accused Meta’s messaging app WhatsApp of “pressuring its users to accept its new terms of use and privacy policy” without providing sufficient transparency and clarity.

Following this complaint, the Commission started a dialogue in January 2022 with WhatsApp to implement several commitments improving transparency, and the possibility of refusal and dismissal of the notifications.

It eventually ended up in March, with WhatsApp agreeing to some corrective measures, although BEUC was not fully satisfied with the final outcome.

[Edited by Luca Bertuzzi/Nathalie Weatherald]

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