Meta cuts the price of its ad-free plan by 40 percent in a bid to sate EU regulators
Meta has long been at loggerheads with European Union officials over its approach to targeted Facebook and Instagram ads. The company is hoping to placate regulators with some changes to its ad model in the bloc, which includes lowering the price of its ad-free subscription. Starting November 13, the plan will cost 40 percent less — €6 ($6.36) per month for signups via the web and €8 ($8.48) for those who subscribe on an iOS or Android device. The fee for each additional Facebook and Instagram account is €4 per month on the web and €5 via mobile.
The company will automatically drop current subscribers down to the lower pricing. It says that it will once again ask users in the bloc if they’d like to sign up.
When they see this prompt (which can only be ignored for a certain period of time), there will be a third option for EU Facebook and Instagram users to choose from. Those who don’t want to pay for a subscription can instead opt to only view ads that are based on what they see in a given session in the apps. Meta will also factor in a few key data markers such as “a person’s age, location, gender and how a person engages with ads.”
These less-personalized ads naturally won’t be as tailored to a given user’s interests, the company notes. As such, people are perhaps less likely to click on such ads. To make up for that (and make sure this option doesn’t hit Meta in the pocket too hard), folks who choose the less-personalized ads option will sometimes encounter unskippable ads. According to The Wall Street Journal, these will be displayed full screen.
“Such ad breaks are common across other services, and are already offered by many of our competitors,” Meta argues. “This change will help us continue to provide value to advertisers which ensures we can offer people a less personalized ads experience at no charge.”
Targeted ads are Meta’s biggest revenue driver, but EU officials have reportedly been pressuring the company to offer a free, less-personalized option in its apps. Meta has argued that would negatively impact its bottom line. Although it has seemingly caved to officials’ requests, the unskippable ad aspect may be construed as malicious compliance, as it worsens the user experience.
Meta claims that these changes to its ad model “meet EU regulator demands and go beyond what’s required” by the bloc’s laws. The company introduced its ad-free subscription a year ago to comply with laws such as the Digital Markets Act (DMA), as well as stricter interpretations of the General Data Protection Regulation. It was previously ordered to seek permission from users in the bloc before showing them personalized ads.
The EU didn’t take too kindly to the paid ad-free approach, however. An investigation into the “consent or pay” model is ongoing. In July, the EU said that in its preliminary findings, Meta was violating the DMA with this plan.
These latest changes are said to be Meta’s attempt to settle the case, but according to the Journal, the EU’s discussions with the company haven’t concluded. The bloc’s regulatory body has until late March to finish its investigation and make a final decision. If it determines that Meta has indeed violated the DMA, the company could be on the hook for a fine of up to 10 percent of its annual global revenue. Based on its total revenue for 2023, it could have to pay up as much as $13 billion or so.This article originally appeared on Engadget at https://www.engadget.com/big-tech/meta-cuts-the-price-of-its-ad-free-plan-by-40-percent-in-a-bid-to-sate-eu-regulators-174926790.html?src=rss
Meta has long been at loggerheads with European Union officials over its approach to targeted Facebook and Instagram ads. The company is hoping to placate regulators with some changes to its ad model in the bloc, which includes lowering the price of its ad-free subscription. Starting November 13, the plan will cost 40 percent less — €6 ($6.36) per month for signups via the web and €8 ($8.48) for those who subscribe on an iOS or Android device. The fee for each additional Facebook and Instagram account is €4 per month on the web and €5 via mobile.
The company will automatically drop current subscribers down to the lower pricing. It says that it will once again ask users in the bloc if they’d like to sign up.
When they see this prompt (which can only be ignored for a certain period of time), there will be a third option for EU Facebook and Instagram users to choose from. Those who don’t want to pay for a subscription can instead opt to only view ads that are based on what they see in a given session in the apps. Meta will also factor in a few key data markers such as “a person’s age, location, gender and how a person engages with ads.”
These less-personalized ads naturally won’t be as tailored to a given user’s interests, the company notes. As such, people are perhaps less likely to click on such ads. To make up for that (and make sure this option doesn’t hit Meta in the pocket too hard), folks who choose the less-personalized ads option will sometimes encounter unskippable ads. According to The Wall Street Journal, these will be displayed full screen.
“Such ad breaks are common across other services, and are already offered by many of our competitors,” Meta argues. “This change will help us continue to provide value to advertisers which ensures we can offer people a less personalized ads experience at no charge.”
Targeted ads are Meta’s biggest revenue driver, but EU officials have reportedly been pressuring the company to offer a free, less-personalized option in its apps. Meta has argued that would negatively impact its bottom line. Although it has seemingly caved to officials’ requests, the unskippable ad aspect may be construed as malicious compliance, as it worsens the user experience.
Meta claims that these changes to its ad model “meet EU regulator demands and go beyond what’s required” by the bloc’s laws. The company introduced its ad-free subscription a year ago to comply with laws such as the Digital Markets Act (DMA), as well as stricter interpretations of the General Data Protection Regulation. It was previously ordered to seek permission from users in the bloc before showing them personalized ads.
The EU didn’t take too kindly to the paid ad-free approach, however. An investigation into the “consent or pay” model is ongoing. In July, the EU said that in its preliminary findings, Meta was violating the DMA with this plan.
These latest changes are said to be Meta’s attempt to settle the case, but according to the Journal, the EU’s discussions with the company haven’t concluded. The bloc’s regulatory body has until late March to finish its investigation and make a final decision. If it determines that Meta has indeed violated the DMA, the company could be on the hook for a fine of up to 10 percent of its annual global revenue. Based on its total revenue for 2023, it could have to pay up as much as $13 billion or so.
This article originally appeared on Engadget at https://www.engadget.com/big-tech/meta-cuts-the-price-of-its-ad-free-plan-by-40-percent-in-a-bid-to-sate-eu-regulators-174926790.html?src=rss