Meta’s ad business faces uncertainty in E.U. after €200 million fine
Illustration by Holly Warfield / Getty / Shutterstock / The Current
European Union regulators fined Meta €200 million ($227 million) last week for introducing its “pay-or-consent” model in 2023, declaring it illegal under the E.U.’s Digital Markets Act (DMA).
Meta introduced a revised model last year, but the European Commission has yet to weigh in on that.
The fine adds another layer of uncertainty to Meta’s ad business in Europe, including for the marketers who rely on it.
“Social media is one of the most unpredictable environments you could be in,” says Andrey Petrov, head of marketing and co-founder at BrainDonors, an agency in the Netherlands. “Advertisers should always look to diversify their marketing channels in a way that they are not fully reliant on a single platform.”
The details
Meta’s model made E.U. users either pay a fee for ad-free Facebook and Instagram or consent to tracking for personalized ads.
The commission ruled that this binary choice didn’t offer meaningful alternatives. It found that the original model “did not give users the … choice to opt for a service that uses less of their personal data but is otherwise equivalent to the ‘personalized ads’ service.”
With the fine, Meta was given 60 days to comply with the “DMA obligation to give consumers the choice of a service that uses less of their personal data” or face “periodic penalty payments.”
It remains unclear how Meta will address that obligation within 60 days.
The commission could still hand the company a lifeline if it finds the revised model to better meet its demands.
Meta, for its part, is pushing back. “The Commission forcing us to change our business model effectively imposes a multi-billion-dollar tariff on Meta while requiring us to offer an inferior service,” said Joel Kaplan, Meta’s chief global affairs officer, in a blog post.
What is the DMA
The Digital Markets Act is the E.U.’s flagship regulation aimed at reining in the power of Big Tech.
In Meta’s case, being a gatekeeper under the DMA, the company must seek users’ consent “for combining their personal data between services,” such as Facebook and Instagram.
Critically, if a user refuses, they must have access to a version of the service that’s “less personalised but [an] equivalent alternative.”
European marketers’ takes
If Meta is forced to run less-personalized services, that could undermine the quid pro quo of social media for advertisers: buying into the “black box” in exchange for the promise of hyper-targeted advertising.
Some European marketers aren’t too worried about this potential new paradigm.
“I think reducing reliance on walled gardens has always been the ambition,” says Yves Van der Haegen, a digital media consultant and former digital lead at Publicis Groupe Belgium. “The need for first-party data is real.”
“Media planners need to remember [that] the job remains the same. Get the product in front of people who care or could be made to care,” Van der Haegen says.
What’s next: Will enforcement be more likely?
Regulators are turning up the heat on Meta — and Big Tech in general.
The social media giant is already facing an antitrust trial in the U.S. brought on by the Federal Trade Commission (FTC), which claims Meta suppressed competition through its WhatsApp and Instagram acquisitions.
The European Commission noted that Meta’s fine was among “the first non-compliance decisions adopted under the DMA.”
The commission’s willingness to fine U.S. Big Tech even amid a trade spat with President Donald Trump comes as Google is facing its own probes for allegedly breaching the DMA with Google Search and its ad tech practices.
Leading European competition lawyers believe European regulators may be more likely to seek structural remedies after a U.S. court found Google had an illegal monopoly in ad tech.
Meta and the E.U.: a timeline
November 2023: Meta launches its original “pay-or-consent” model across the E.U., charging users up to €12.99 a month for an ad-free version of Facebook and Instagram. Alternatively, users could give their consent to tracking for advertising purposes.
June 2024: The commission issues its preliminary findings that the model violates the DMA , saying that “this binary choice … fails to provide [users] a less personalised but equivalent version of Meta’s social networks.”
November 2024: In response to the June missive, Meta unveils a revised model, introducing a less personalized ad-supported option based on contextual signals and reducing the price of its existing ad-free option.
April 2025: The commission fines Meta €200 million, officially ruling the original model unlawful. It is still reviewing the revised model.