Meta Appeals EU Ruling Over Subscription-Based Ad Model Under DMA

(MENAFN- Kuwait News Agency (KUNA)) BRUSSELS, July 3 (KUNA) -- Meta announced Thursday it is formally appealing a European Commission decision that found its subscription-based ad model in violation of the Digital Markets Act (DMA).
The Commission ruled that Meta's current service in Europe -- which offers users a choice between a paid, ad-free subscription and a free, ad-supported version -- does not comply with the DMA.
In a blog post, Meta Vice President Tim Lamb called the decision "both incorrect and unlawful," arguing it contradicts existing legal precedent and undermines fair commercial practices in Europe's digital market.
Lamb referenced a July 4, 2023 ruling by the Grand Chamber of the European Court of Justice (CJEU), which, prior to the enforcement of Article 5 of the DMA, upheld that dominant platforms may lawfully seek user consent by offering a choice between paid and personalized ad models.
"This ruling directly applies to Meta and addressed the same data processing issues now under scrutiny," Lamb said, "yet the Commission has disregarded it, wrongly concluding that our user choice model fails to meet DMA standards."
He added that national courts and data protection authorities in France, Denmark, and Germany have shown support for similar models, yet Meta remains the only company barred from offering both options.
Lamb pointed out that the Commission's decision forces the company to offer a "less personalized advertising" (LPA) model for free, disregarding its commercial implications and economic sustainability
He warned that this imposed model compromises Meta's revenue from innovative services while limiting users' ability to choose the experience they prefer.
According to Lamb, Meta's LPA model uses 90 percent less data than personalized advertising, which made user engagement dropped and advertisers are seeing weaker outcomes.
Despite clear concerns from European advertisers, Lamb said their feedback has been disregarded.
He also warned that the Commission's approach risks undermining the objectives of the DMA, namely fostering competition and innovation
"This raises serious concerns over whether the DMA is being applied cooperatively, or simply used as a punitive tool," he said.
Lamb concluded by calling on European stakeholders for a reset in regulatory dialogue to restore trust and balance, through re-engage in genuine, collaborative discussions, saying "It is in the interest of European consumers, businesses, and innovation". (end)
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