Meta May Allow Instagram and Facebook Users in Europe to Pay to Avoid Ads

Share via:

The subscription plan is a response to European Union policies and court rulings to restrict Meta’s data-collection practices.

Meta is considering paid versions of Facebook and Instagram that would have no advertising for users in the European Union, three people with knowledge of the company’s plans said, a response to regulatory scrutiny and a sign that how people experience technology in the United States and Europe may diverge because of government policy.

Those who pay for Facebook and Instagram subscriptions would not see ads in the apps, said the people, who spoke on the condition of anonymity because the plans are confidential. That may help Meta fend off privacy concerns and other scrutiny from E.U. regulators by giving users an alternative to the company’s ad-based services, which rely on analyzing people’s data, the people said.

Meta would also continue to offer free versions of Facebook and Instagram with ads in the European Union, the people said. It is unclear how much the paid versions of the apps would cost or when the company might roll them out.

A Meta spokesman declined to comment.

For nearly 20 years, Meta’s core business has centered on offering free social networking services to users and selling advertising to companies that want to reach that audience. Providing a paid tier would be one of the most tangible examples to date of how companies are having to redesign products to comply with data privacy rules and other government policies, particularly in Europe.

In July, the European Union’s highest court effectively barred Meta from combining data collected about users across its platforms — including Facebook, Instagram and WhatsApp — as well as from outside websites and apps, unless it received explicit consent from users. In January, the company was also fined 390 million euros by Irish regulators for forcing users to accept personalized ads as a condition of using Facebook.

The rulings stemmed from the 2018 enactment of Europe’s General Data Protection Regulation, or G.D.P.R., which was landmark legislation to protect people’s online data.

Meta’s openness to creating paid subscriptions shows how those living in the European Union, which comprises 27 countries and roughly 450 million people, may begin to see different versions of consumer technology products because of new laws, regulations and court rulings.

In recent weeks, as a new E.U. law called the Digital Services Act took effect to stem the flow of illicit content online, TikTok and Instagram users in the region have also been able to block personal data from being used to generate their social media feeds. Snapchat and Meta have stopped marketers from targeting teenagers ages 13 to 17 in Europe with personalized ads.

By next year, another E.U. tech-focused law, the Digital Markets Act, will take effect. That is set to force big tech platforms to change certain business practices to encourage competition and will have wide-ranging impacts, with Apple expected to allow users in the European Union to download alternatives to the App Store on iPhones and iPads for the first time.

“This shows that tech companies are complying with the E.U.’s digital regulations, suggesting that they remain beholden to governments and not the other way around,” said Anu Bradford, a Columbia University law professor and the author of “Digital Empires: The Global Battle to Regulate Technology.”

Meta, which also owns Messenger, has faced particular scrutiny from E.U. regulators. In May, the bloc fined the Silicon Valley company €1.2 billion for violating its privacy laws by sending data on European citizens back to U.S. servers for the purposes of improving the company’s advertising technology. Meta has appealed the ruling.

Meta has been fined for other violations of G.D.P.R., including a €265 million fine for a 2021 data leak. Irish regulators have also levied fines of €225 million over violations in a case involving WhatsApp, and another €17 million over a data leak.

Some Meta insiders believe that giving users the choice of opting out of an ad-based service while still having access to a paid version of Facebook or Instagram could alleviate some European regulators’ concerns, two of the people said. Even if few people choose the paid version, making such an option available could serve Meta’s interests in the region, they said.

Meta has not released its new app Threads, which is a rival to X, formerly known as Twitter, in Europe because of regulatory concerns.

Europe is the second most lucrative region for Meta after North America. Susan Li, Meta’s chief financial officer, said in April that advertising in the European Union accounted for 10 percent of the company’s overall business. Meta’s revenue totaled nearly $117 billion last year.

Beyond its European challenges, Meta is trying to rejuvenate its business after global economic jitters hampered ad sales growth. It is also still pushing its vision of the immersive digital world of the metaverse, an expensive project championed by Mark Zuckerberg, the company’s chief executive, which is still in its earliest days. And executives are focusing on developing artificial intelligence technologies and incorporating them into more of Meta’s products.

Disclaimer

We strive to uphold the highest ethical standards in all of our reporting and coverage. We StartupNews.fyi want to be transparent with our readers about any potential conflicts of interest that may arise in our work. It’s possible that some of the investors we feature may have connections to other businesses, including competitors or companies we write about. However, we want to assure our readers that this will not have any impact on the integrity or impartiality of our reporting. We are committed to delivering accurate, unbiased news and information to our audience, and we will continue to uphold our ethics and principles in all of our work. Thank you for your trust and support.

Popular

More Like this

Meta May Allow Instagram and Facebook Users in Europe to Pay to Avoid Ads

The subscription plan is a response to European Union policies and court rulings to restrict Meta’s data-collection practices.

Meta is considering paid versions of Facebook and Instagram that would have no advertising for users in the European Union, three people with knowledge of the company’s plans said, a response to regulatory scrutiny and a sign that how people experience technology in the United States and Europe may diverge because of government policy.

Those who pay for Facebook and Instagram subscriptions would not see ads in the apps, said the people, who spoke on the condition of anonymity because the plans are confidential. That may help Meta fend off privacy concerns and other scrutiny from E.U. regulators by giving users an alternative to the company’s ad-based services, which rely on analyzing people’s data, the people said.

Meta would also continue to offer free versions of Facebook and Instagram with ads in the European Union, the people said. It is unclear how much the paid versions of the apps would cost or when the company might roll them out.

A Meta spokesman declined to comment.

For nearly 20 years, Meta’s core business has centered on offering free social networking services to users and selling advertising to companies that want to reach that audience. Providing a paid tier would be one of the most tangible examples to date of how companies are having to redesign products to comply with data privacy rules and other government policies, particularly in Europe.

In July, the European Union’s highest court effectively barred Meta from combining data collected about users across its platforms — including Facebook, Instagram and WhatsApp — as well as from outside websites and apps, unless it received explicit consent from users. In January, the company was also fined 390 million euros by Irish regulators for forcing users to accept personalized ads as a condition of using Facebook.

The rulings stemmed from the 2018 enactment of Europe’s General Data Protection Regulation, or G.D.P.R., which was landmark legislation to protect people’s online data.

Meta’s openness to creating paid subscriptions shows how those living in the European Union, which comprises 27 countries and roughly 450 million people, may begin to see different versions of consumer technology products because of new laws, regulations and court rulings.

In recent weeks, as a new E.U. law called the Digital Services Act took effect to stem the flow of illicit content online, TikTok and Instagram users in the region have also been able to block personal data from being used to generate their social media feeds. Snapchat and Meta have stopped marketers from targeting teenagers ages 13 to 17 in Europe with personalized ads.

By next year, another E.U. tech-focused law, the Digital Markets Act, will take effect. That is set to force big tech platforms to change certain business practices to encourage competition and will have wide-ranging impacts, with Apple expected to allow users in the European Union to download alternatives to the App Store on iPhones and iPads for the first time.

“This shows that tech companies are complying with the E.U.’s digital regulations, suggesting that they remain beholden to governments and not the other way around,” said Anu Bradford, a Columbia University law professor and the author of “Digital Empires: The Global Battle to Regulate Technology.”

Meta, which also owns Messenger, has faced particular scrutiny from E.U. regulators. In May, the bloc fined the Silicon Valley company €1.2 billion for violating its privacy laws by sending data on European citizens back to U.S. servers for the purposes of improving the company’s advertising technology. Meta has appealed the ruling.

Meta has been fined for other violations of G.D.P.R., including a €265 million fine for a 2021 data leak. Irish regulators have also levied fines of €225 million over violations in a case involving WhatsApp, and another €17 million over a data leak.

Some Meta insiders believe that giving users the choice of opting out of an ad-based service while still having access to a paid version of Facebook or Instagram could alleviate some European regulators’ concerns, two of the people said. Even if few people choose the paid version, making such an option available could serve Meta’s interests in the region, they said.

Meta has not released its new app Threads, which is a rival to X, formerly known as Twitter, in Europe because of regulatory concerns.

Europe is the second most lucrative region for Meta after North America. Susan Li, Meta’s chief financial officer, said in April that advertising in the European Union accounted for 10 percent of the company’s overall business. Meta’s revenue totaled nearly $117 billion last year.

Beyond its European challenges, Meta is trying to rejuvenate its business after global economic jitters hampered ad sales growth. It is also still pushing its vision of the immersive digital world of the metaverse, an expensive project championed by Mark Zuckerberg, the company’s chief executive, which is still in its earliest days. And executives are focusing on developing artificial intelligence technologies and incorporating them into more of Meta’s products.

Disclaimer

We strive to uphold the highest ethical standards in all of our reporting and coverage. We StartupNews.fyi want to be transparent with our readers about any potential conflicts of interest that may arise in our work. It’s possible that some of the investors we feature may have connections to other businesses, including competitors or companies we write about. However, we want to assure our readers that this will not have any impact on the integrity or impartiality of our reporting. We are committed to delivering accurate, unbiased news and information to our audience, and we will continue to uphold our ethics and principles in all of our work. Thank you for your trust and support.

Website Upgradation is going on for any glitch kindly connect at office@startupnews.fyi

More like this

Why vector databases are having a moment as the...

Vector databases are all the rage, judging by...

Notable Capital’s Hans Tung on the state of VC...

To some investors, “down round” is a dirty...

Mamaearth Parent To Amalgamate Two Subsidiaries With Itself To...

SUMMARY Honasa’s board approved the amalgamation of two of...

Popular

Upcoming Events

Startup Information that matters. Get in your inbox Daily!