Facebook and Instagram users in the European Union can now choose to see less personalized ads when using the apps. Meta has launched a new app option to satisfy regulators investigating breaches of the Digital Markets Act and the General Data Protection Regulation.
This free option will cause users to see ads that are less relevant to their interests. The ads they see will depend on their browsing activity that session and some other data points, including age, location, and gender.
Meta said in a report that personalized advertising enhances companies’ revenues press release. She pointed out Internal study Apple’s app tracking transparency requirements stipulate that iOS apps must ask users for permission to share their data-driven companies’ price increases by at least 3.4% as their ads become less effective, he explains.
To counter the negative impact of the less personalized option on Meta advertisers, users who choose it will also see non-skippable ads for a few seconds. This “will allow advertisers to connect with a wider audience.”
In addition to the new ad option, Meta is cutting the price of the ad-free subscription tier by 40%, from €9.99 to €5.99 per month on web and from €12.99 to €7.99 per month on iOS and Android. Each additional account will cost another €4 per month on web and €5 per month on mobile.
See: UK competition watchdog accepts Meta’s proposed changes to use of advertising data
Meta says the demands on advertising go too far
In the announcement, the tech giant said the EU’s ad demands go beyond “what’s required by law,” but it’s rolling back regardless.
Meta added that European companies generate €107 billion in revenue from personalized advertising on their platforms every year. However, this is expected to erode if it is forced to make digital advertising less efficient. Meta also pointed to September a report Former European Central Bank President Mario Draghi has called for comprehensive reform to make the region more economically competitive.
“We are committed to personalized advertising, which will always be the cornerstone of a free and inclusive Internet,” Meta said in the announcement.
EU’s ongoing crackdown on Meta advertising practices
In recent years, the European Union has done its best to protect citizens’ digital autonomy and hold big tech companies accountable for their data collection and privacy practices. Meta has spent a lot of time in the crosshairs, as Facebook and Instagram rely heavily on collecting user data to perform behavioral analytics and precisely target ad campaigns.
A large portion of these platforms’ revenue comes directly from clicks and targeted ads that generate engagement. Thus, losing a slice of user data as large as the population of the 27-nation EU bloc could mean major trouble for its continued growth, so Meta has a financial interest in conceding to the EU’s demands. In the third quarter of this year 23.5% of advertising revenue Created by European users.
At the beginning of 2023, the E.U Data Protection Committee Meta required users to obtain consent before showing them personalized ads. It acknowledged the following November by offering a subscription option that completely removes targeted ads from Facebook and Instagram for European users, starting at €13 per month on mobile. These fees were intended to offset the financial losses that would be felt if many European users did not consent to targeted advertising.
However, on 1 July this year, the European Commission ruled that this amounted to a “pay or consent” declaration model and violated the DMA on a prima facie basis. The authority claimed that he was essentially dead It “forces” users to consent to the use of their data for advertising It does not offer an equivalent free and less personalized service for those who do not consent.
SEE: Apple’s geo-blocking practices may violate EU rules
The EU could impose heavy fines on Meta
If the initial results are confirmed, Meta could face fines of up to 10% of its total global sales – or 20% for repeat infringers – which is likely a strong incentive behind introducing the new advertising option this week. The committee has until March 25, 2025 to issue a ruling, but it remains unclear whether the less personalized declaration option would allow them to escape a fine.
Use Facebook and Instagram Data from previous browsing sessions To choose which ads will be displayed. So, even if users who choose the less personalized tier are only seeing ads based on their current session, that session could still be influenced by data collected in the past. This practice may not sit well with regulators.
Over the years, the DPC has fined Meta several times for violating GDPR rules based on its targeted advertising practices. In addition to the DMA and GDPR, Meta must comply with the Digital Services Act, which is a set of rules designed to regulate how “Very large online platforms“Dealing with privacy, protecting its users, and working transparently.
But it’s not just advertising data that Meta and the EU are fighting over. In June, Meta has delayed training its large language models on public content shared on Facebook and Instagram in Europe after regulators suggested it may need to obtain approval from content owners. Meta AI, the frontier AI assistant, has not yet been released within the bloc due to… “Unexpected” regulations..
See: EU AI law: Europe’s new rules for AI
Representatives from Meta, along with Spotify, SAP, Ericsson, Klarna, and others, signed an open letter in September to Europe expressing concerns about “inconsistent regulatory decision-making.” It says interventions by European data protection authorities have created uncertainty about the data they can use to train their AI models.