by Izabella Szoboszlai
It is no exaggeration to say that 2023 was a particularly busy year for digital platforms. It seems that the hard work of various legal fields has finally come to fruition, even though we may experience interruptions from time to time. One lesson learned is that modifying problematic behaviour in isolation can often lead to new issues. A case in point is the recent changes on Meta's social media platforms.In November 2023 Meta has introduced its “pay-for-no-ad” model on Facebook and Instagram in the EU. This led to confusion among Hungarian users, who received a pop-up message offering a choice: “Decision regarding the advertisements displayed to you. In connection with the changing legislation of your region, you can already decide whether to continue using Meta's products for free in such a way that you authorized us to use your data for advertising purposes, or you can subscribe and use them without ads. Start.”It is no wonder that the above information caused confusion, since it is not clear in that respect either that whether it is an actual decision-making situation and, if so, what exactly the decision should be about. Does Meta actually provide the possibility of using its platforms without data management or does it offer the possibility of using them without ads? Is the paid version offer only an ad-free experience, but does it also entail the use of personal data and intricate complex data management? Do the users actually need a decision regarding the use of the social media or is it about the data management? Additionally, it remains entirely unclear what legal changes prompted these decision-making options, it appears less a matter of user choice and more an obligation imposed on the Meta platforms. As a result of developments in law enforcement and legislation in recent years, Meta has no other choice but to ask directly its consumers to give their express consent to handling their data.The most significant European consumer protection organization, BEUC, responded quickly and specifically to the signals of European consumers, and published its paper on the subject on 30 November 2023, calling for a coordinated action of the European Consumer Protection Cooperation Network. Although the document is called “An assessment of Meta’s new paid-subscription model from a consumer law perspective”, it has a subtitle that says more: “Choose to lose with Meta”.[1]The document highlights that while Meta appears to offer consumers a straightforward choice between a „free” service with ads or a paid service without ads, but actually the way the choices are offered is misleading and omits key information necessary for consumers to make an informed transactional decision. The content of Meta’s pop-up information as a whole implies that even those users who have subscribed to paid services will continue to have their personal data collected and used for other purposes than ads. Moreover, promotional content and advertisements on the services continue to be displayed even for consumers who have opted for the paid version.According BEUC, Meta presents misleadingly the alternative to the paid option as „continuing for free”, because Meta’s products are not “free”. An Italian court judgment of 10 January 2020, confirmed this by fining Facebook for falsly marketing its service as “free”, while concealing that the actual exchange in the contact involved personal data. This data, possessing measurable economic value, was utilized beyond the mere operation of the social network. The recent Meta communication offering users the possibility of continiung the use of the network „for free” misleadingly implies that nothing will change for consumers who opt for the non-paid version, because in fact Meta has until now been collecting and treating consumers’ personal data without a valid legal basis under the GDPR. By the way the Hungarian courts did not or did not fully accept the above approach when reviewing the decision of the Hungarian Competition Authority’s Facebook case issued on 6 December 2019.[2] The second theme raised by the BEUC paper is that Meta’s practice should be considered as an aggressive unfair commercial practice because there is no other choice for most of the consumers than agreeing on the use of their personal data for advertising purposes. Generating an impression of urgency, persistence, and limited choice leads to a forced subscription practice and it should be seen as a dark pattern as consumers are not able to exercise their free and well-informed choice.Finally, according to the BEUC systematic GDPR infringements must be considered unfair commercial practices prohibited under EU consumer law, especially under the UCPD. Moreover, Meta’s practice „contributes to turn privacy into a ‘tradable product’ with a risk of worrying consequences for the future of the platform economy and consumers’ wellbeing.”Given the recent European developments, neither the above modification of Meta’s model and practice, nor the BEUC's proposals are surprising.The decision of 6 February 2019 of the Bundeskartellamt ordered Facebook to cease combining off-platform data with in-platform data unless Facebook has a valid and legal user consent on the different data categories. During the review of the decision, the European Court of Justice[3] came to the cardinal consideration in July 2023 that even a competition authority might interpret the GDPR in its antitrust law analysis - subject to some conditions and limitations. For example, competition supervision can not replace data protection supervisions and should take into strict consideration the decisions of data protection authorities. Authorities should cooperate to avoid the divergent interpretations of the GDPR.
The European Court of Justice recorded important statements on privacy questions as well. It stated that users’ privacy interests outweigh Meta’s interest to monetise its service through targeted advertising, thus the dominant company can ask for consent, but consent must be given voluntarily: “…users must be free to refuse […] to give their consent to particular data processing operations […] without being obliged to refrain entirely from using the service […], which means that those users are to be offered, if necessary for an appropriate fee, an equivalent alternative […]”
Actually the European Court of Justice did not explained what “appropriate” or „equivalent” is in the given case, so the markets and the authorities will determine the very content.
It should also be taken into account that on 25 August 2023, the Digital Services Act came into effect for very large online platforms like Facebook. Article 25 of the Digital Services Act states that providers of online platforms shall not design, organise or operate their online interfaces in a way that deceives or manipulates their users or in a way that otherwise materially distorts or impairs the ability of their users to make free and informed decisions. The Article lists three specific practices as examples, one of them is giving more prominence to certain choices when asking the user for a decision.
On 27 October 2023 in its urgent binding decision, the European Data Protection Board considered that there is a need for urgent measures and instructed the Irish data protection authority to issue a ban on Meta’s processing of personal data for behavioural advertising purposes on the legal basis of contract and legitimate interest across the EEA.[4] The Irish data protection authority adopted its final decision on 10 November 2023, imposing a ban on Meta Ireland Limited. Meta was given one week to implement the ban.
Despite these developments, Meta's response to integrate a decision screen is likely a direct consequence of the Bundeskartellamt's decision. However, this response seems to overlook the need for compliance with a broader range of regulations beyond privacy or antitrust laws. Though a lot of questions are open, and discussions are ongoing, as the European law enforcement has worked out new aspects, it is not surprising that BEUC boldly claims that Facebook was never free, and it cannot be disputed that the above-mentioned suggestion for the consumer protection interaction is well-founded and legitimate. If the current adjustments fail and only lead to more problems, it suggests a need to revisit the fundamentals, such as integrating stronger consumer protection measures.
[1] https://www.beuc.eu/sites/default/files/publications/BEUC-X-2023-156_Annex_Legal%20assessment_Choose_to_lose_with_Meta_Legal_analysis.pdf
[2] https://www.gvh.hu/en/resolutions/resolutions_of_the_gvh/archive/resolutions_2016/vj-852016189
[3]https://curia.europa.eu/juris/document/document.jsf?text=&docid=275125&pageIndex=0&doclang=EN&mode=
[4] https://edpb.europa.eu/news/news/2023/edpb-publishes-urgent-binding-decision-regarding-meta_en
