Meta’s “Pay or OK” model is not OK?

Aušra Mažutavičienė
Written by
Aušra Mažutavičienė
April 29, 2024

The background

As you may recall, Meta introduced a “pay or OK” or “pay or consent” model in November 2023. Meaning that you either have to pay for using Facebook or accept that you’ll be tracked and targeted for ads.

Meta introduced this model because they had faced legal issues earlier that same year: in October 2023, the European Data Protection Board (EDPB) issued a binding decision banning Meta’s targeted advertising practices across the EU/EEA. Meta had also received a whopping 390 million euro fine from Ireland's data protection authority over its targeted advertising practices earlier last year.

Many were sceptic towards Meta's new approach. More specifically, can a consent meet the requirement of being “freely given” when users either have to pay to avoid getting tracked or accept to be tracked and advertised to?

The data protection authorities in the Netherlands, Norway and Hamburg were among those criticising Meta’s new model and sought EDPB clarity on the matter.

So the EDPB’s opinion on this was very highly anticipated.

The decision: "pay or ok" is not OK

This week, the EDPB issued its opinion that large online platforms implementing pay-or-consent models will, "in most cases," not comply with the GDPR.

According to the EDPB, the offering of (only) a paid alternative to targeted advertising “should not be the default way forward for controllers”, i.e. online platforms should offer an alternative that does not entail the payment of a fee.

While the opinion only applies to large online platforms, the EDPB said it would issue further guidance later this year on pay-or-consent models to smaller platforms, outside the scope of what the body designates as "large platforms" in the opinion.

The definition of “very large online platforms” was introduced in the Digital Services Act and covers platforms that have more than 45 million users per month in the EU. So it’s mostly Big Tech companies that fall within this scope.

What does it mean?

This opinion may have a massive impact on Meta’s adtech practices in the EU. And not just Meta’s. Same goes for LinkedIn, Youtube, etc.

However, the opinion is nonbinding. This means that the national data protection authorities will consider the pay-or-consent model on a case-by-case basis and make a final decision themselves.

So will it really bring more consistency across Europe?

This opinion will certainly be considered by national data protection authorities in their investigations of Meta, but it won’t necessarily be the final decisions that, for example, the Irish authority will take.

Others (e.g. the privacy activist Max Schrems) are more certain that this decision is going to change the way Meta operates in Europe. "Overall, Meta is out of options in the EU," Schrems said in a statement. "It must now give users a genuine yes/no option for personalised advertising."

This change could also significantly impact other stakeholders, especially advertisers. With fewer users viewing ads on Big Tech platforms, advertisers may need to rethink their strategies and explore other options.

So should we prepare for (even more) new developments in adtech privacy? We’ll just gonna have to wait and see what happens next

All the best,

Stine, Ausra and the Openli Team