European regulator rejects Meta’s ‘pay-or-okay’ model

In line with expectations, the European Data Protection Board (EDPB) issues a negative opinion on Meta’s ‘Pay-or-okay’ business model. This makes advertisers nervous, because does it still make sense to offer targeted advertising if it is not allowed?

In the news : The EDPB criticizes Meta’s ‘pay-or-okay’ model.

• With Pay-or-okay, as a user you have a choice: either Meta can collect, use and resell your data, or you pay a monthly amount to Meta not to use your Facebook and Instagram data.
• The EDPB, which is an advisory body of privacy supervisory authorities, believes that this choice is not fair. He considers the privacy risk of the current advertising model to be too high. Users don’t understand all the rights they are giving up by clicking ‘accept’, that is the feeling.
• In addition, the paid option is considered too expensive by the EDPB. The European Court of Justice has previously ruled that social media platforms can demand ‘appropriate remuneration’ from their users. With plans ranging from 9.99 euros to 12.99 euros per month, Meta does not meet this requirement, concludes the regulator.
• In response to Financieele Dagblad, Meta said he found the criticism unfounded: “Digital platforms generate significant costs. Businesses cannot be forced to provide their services in an unsustainable manner. »
• The EDPB’s opinion is not binding. In practice, nothing should change for the moment in the model proposed by Meta. The company had previously said it was ready to make subscriptions cheaper: 5.99 euros for one account and 4 euros for each additional account.

Will GDPR rules become stricter?

To be continued : What does this mean now for advertisers?

• The EDPB’s ruling could prompt legislative bodies to take a closer look at websites’ revenue models. It is possible that the Irish Privacy Commission will begin an investigation into the cost of subscriptions. Meta having its headquarters in Ireland, it is subject to the legislation of this country.
• This explanation of the EDPB may have other consequences. EU GDPR rules make it clear that users should be able to choose whether they want to share their personal data. If lawmakers follow the EDPB’s advice, businesses will have fewer options overall for targeted advertising.
• Advertisers are therefore following these developments closely. They fear that regulations will become even stricter, reducing their ability to offer advertisements. Wider deployment of the opt-out system also reduces the possibilities for targeted advertising.
• However, not all advertising agencies are pessimistic. The Dutch GroupM sees as many opportunities in the short term as before the introduction of the opt-out system, it told the FD. He believes it is very unlikely that users will pay en masse to keep their data private. This is also confirmed by a study, according to the FD : 99% of Facebook and Instagram users would not be ready to pay.