On the 1st (local time), Meta was found to have violated the Digital Markets Act (DMA) of the European Union (EU), marking the third instance of DMA violation following last month’s violations by Apple and Microsoft Corporation. The EU has determined that Meta has breached the DMA. In case the preliminary conclusion is confirmed, Meta may be fined up to 10% of their annual sales, which amounts to $13.4 billion. EU’s competition violation sanctions against U.S. big tech companies including Apple and Microsoft Corporation are getting bigger.
On the 1st (local time), the EU concluded that Meta had violated the DMA by launching a tailored advertising service.
Meta is the parent company of Facebook and Instagram which started a service last year in Europe sending personalized advertisements to users who have not subscribed to their paid services. Accordingly, the EU judged this act as hindering market competition.
The EU Commission concluded that Meta forced users to either pay or allow their personal information to be used in advertisements, which is regarded as monopolistic behavior.
Meta introduced a new service last October that requires users to pay a minimum of 10 euros ($10.81) per month if they disagree with data collection for advertising purposes following a ruling by the EU’s highest court, the European Court of Justice (ECJ).
However, the commission stated on the 1st that Meta’s tailored advertising service violated the EU’s DMA in two major areas: limited selection in advertisements and free consents.
First, ECJ pointed out that users are not allowed to receive a service similar to tailored advertising while using less personal information.
The commission stated that users should have the option to see the benefits equivalent to the tailored advertising service, even if users provide less information.
Another reason is that Meta’s tailored advertising service did not allow for the free consent rights of the users.
Even though the users have the right to freely make decisions about whether their data can be used for online personalized advertising, Meta essentially forced users to allow the use of their information.
Meta must make necessary revisions to the pointed issues before the Commission makes its final decision, or else they will face a hefty fine.
According to the DMA, in such cases, they must pay a fine of up to 10% of their global annual sales. If the violation is repeated, the fine limit increases to 20%.
The EU Commission made a preliminary conclusion last month that Apple and Microsoft had violated the DMA. If the final decisions are made, Apple, Microsoft, and Meta each have to pay a fine of up to 10% of their global annual sales. The final decision deadline for Apple is March 25 next year. Following Apple, Microsoft and Meta are at a high risk of facing hefty fines around the same time.
