Meta’s EU ad-free subscription faces an early privacy challenge

Meta’s shiny new bid to circumvent European Union privacy rules – by offering users a false choice between paying it a hefty monthly subscription for ad-free version of Facebook and Instagram or agree to give up their privacy rights in exchange for free access to its social networks, meaning they can be tracked and profiled by the behavioral advertising giant – pointed out in a complaint that filed by the privacy rights group november in Austria.

When Meta’s plan to deploy a ‘pay or okay’ gaming tactic on a permissive legal basis was leaked to journalists last month noyb vowed to fight it “up and down in the courts”. It made good on that promise today by launching a challenge to Austria’s data protection authority.

Meta’s ad-free subscription for regional users has an initial cost of €9.99/month on the web or €12.99/month on iOS or Android per linked Facebook and Instagram accounts in the Accounts Center at one user (with an additional fee of €6/month on the web and €8/month on iOS or Android set to apply for each additional account listed in the Account Center of a user from March next year) .

Noyb argued that the cost of the subscription was “out of proportion” to the value that Meta would get from tracking users in the region – quoted company reporting that the average revenue per user in Europe between Q3 2022 and Q3 2023 is only $16.79. That number would correspond to an annual income of €62.88 per user – while the Meta subscription sets a minimum annual cost for users to protect their privacy of around €120, which rises to over € 250 for users with a Facebook and Instagram account.

The individual for whom noyb filed the complaint in Austria is in “financial difficulty” and receives unemployment benefits – indicating that he cannot divulge much to protect his privacy. Commenting in a statement, the founder and chairman of noyb, Max Schrems, said: “More than 20% of the population of the EU is already at risk of poverty. For the complainant in our case, like many others, a ‘Pay or Okay’ system means paying rent or privacy.”

The noyb also argued that if other app makers adopt the same approach the cost for users to protect their privacy will increase significantly – with EU citizens facing a “fundamental rights charge ” which can stack up to several thousand euros per year for people who have an average number of apps installed on their phone.

“If Meta is successful in defending this new approach, it is likely to cause a domino effect,” it warned. “Now, TikTok is reportedly testing an ad-free subscription outside the US. Other app providers may follow suit in the near future, making online privacy out of reach.

According to Google, the average person has 35 apps installed on their smartphone. If all these apps followed Meta’s lead and charged the same fee, people would have to pay a ‘fundamental rights fee’ of €8,815.80 a year. For a family of four, the price of data privacy rises to €35,263.20 per year – more than the average full-time income in the EU. Obviously, these figures become even more extreme in EU Member States with lower average incomes. “

Meta points to a reference to an EU Court of Justice ruling from this summer, related to its legal basis for processing user data for ads, to justify charging payment for a product without tracking. However, the Court restricted the possibility of it charging a fee for a non-traceable version of its product by stipulating that any such fee must be “necessary” and “appropriate”.

noyb’s complaint appears to point to Meta’s willingness to charge users way more money to avoid tracking it than it earns for each individual it tracks. Or, in short, the adtech giant is deliberately creating a privacy rip-off to continue destroying people’s privacy.

The EU’s General Data Protection Regulation (GDPR) sets the conditions for what constitutes legally obtained consent to the processing of personal data – which includes a strict requirement for consent to be “freely given” .

Noyb’s argument is based on showing that such a high financial cost represents an insurmountable bar to EU citizens who can freely choose to exercise their fundamental right to privacy.

This too focuses on research that it says most people don’t want their data used to target them with “personalized” ads – while other studies show people are extremely pressured to agree to tracking when faced with paying a fee.

“Basic rights are generally available to everyone. How many people would still exercise their right to vote if they had to pay €250 to do so? There were times when basic rights were reserved for the rich. It seems the It’s going to set us back over a hundred years,” Schrems said.

“EU law requires that consent is truly free will of the user. Contrary to this law, Meta charges a ‘privacy fee’ of up to €250 per year if someone dares to exercise their fundamental right to protection of data,” added Felix Mikolasch, data protection lawyer at noyb, in another supporting statement.

The privacy rights group is calling for the Austrian DPA to trigger an urgent procedure to stop what it says is illegal processing by Meta because of what it says are the seriousness of the violations and the unusually large number of users. which is affected. It also urged the DPA to impose a deterrent fine to ensure that others do not seek to replicate Meta’s latest privacy theft.

Meta was contacted for a response to noyb’s complaint.

Spokesman Matthew Pollard points back to this previous blog post – where it defends the procedure, claiming that it complies with EU laws. He also sent us this statement:

The option for people to purchase a subscription without ads balances the requirements of European regulators while giving users choice and allowing Meta to continue serving all people in the EU, EEA and Switzerland. In its judgment, the CJEU expressly recognized that a subscription model, as we have already informed, is a valid form of consent for a service financed by advertisements.

On subscription costs, Pollard suggested that Meta’s pricing is “in line” with other ad-free premium subs offered by streaming services – such as the YouTube Premium, Spotify Premium, Netflix Standard and TWitch Turbo.

However, these rivals do not always offer blanket prices across the EU, making comparisons challenging. (Furthermore, Pollard’s comparative example deals with pricing in the UK – a country that is not even an EU Member State.)

In addition, in the case of Spotify and Netflix, both are services that stream professionally licensed content, which makes them a poor comparison to Meta’s product because the adtech giant can freely obtain content from Facebook and Instagram users (don’t have to pay a user license fee – but, hey, maybe you should?).

Although YouTube Premium gives paying customers access to licensed content because it bundles YouTube Music.

Pollard also included the social network Reddit on this list. Yet its ad-free Premium offering (priced at US$5.99pm) appears to be roughly half the cost of Meta’s web-based monthly subscription fee; and more than its mobile pricing (meta’s fees of €9.99pm/€12.99pm have been shaken to ~US$10.94/US$14.20). So this perhaps stands as the best example of the adtech giant raising the fees it charges EU Facebook and Instagram users to get ad-free versions of its products.

The artificially high prices suggest that these are products that Meta does not want anyone in the EU to pay for. Instead they are designed to force users of major social networks to continue to allow it to track and profile their online activity – so they can continue to earn billions from their advertiser customers.

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