Facebook and Instagram users in the EU can now opt to see less personalized ads when using the apps. Meta has launched a new app option to appease regulators investigating privacy violations. Digital Markets Act And GDPR.

This free option will allow users to see advertisements less tailored to their interests. The ads they see will be based on their browsing activity during that session and a few other data points, including their age, location, and gender.

Personalized advertising increases business revenue, Meta said in a statement. press release. He was referring to a internal study showing that Apple Application tracking transparency The requirement requires iOS apps to ask users for permission to share their data. Companies must raise prices by at least 3.4% as their ads become less effective.

To counteract the negative impact of the less personalized option on Meta’s advertisers, users who opt in will also see non-skippable ads for a few seconds. This will “allow advertisers to connect with a wider audience.”

In addition to the new advertising option, Meta is reducing the price of its advertising-free subscription by 40%, from €9.99 to €5.99 per month on the web and from €12.99 to €7.99 per month on iOS and Android. Each additional account will cost an additional €4 per month on web and €5 per month on mobile.

SEE: UK competition watchdog accepts Meta’s proposed changes to use of advertising data

Meta says advertising requirements go too far

In its announcement, the tech giant said the EU’s advertising requirements go “beyond what is required by law,” but it caves anyway.

Meta added that European companies earn €107 billion in revenue every year from personalized ads on their platforms. However, this is expected to erode if digital advertising is forced to become less effective. Meta also referred to a month of September report by the former president of the European Central Bank, Mario Draghi, who requested a redesign make the region more economically competitive.

“We remain committed to personalized advertising, which will always be the cornerstone of a free and inclusive Internet,” Meta said in the announcement.

EU’s continued lawsuit against Meta’s advertising practices

In recent years, the EU has worked hard to protect citizens’ digital autonomy and hold big tech companies accountable for their data collection and privacy practices. Meta has spent a lot of time in its crosshairs, as Facebook and Instagram rely heavily on collecting user data to perform behavioral analytics and granularly target ad campaigns.

A large portion of these platforms’ revenue comes directly from clicks and engagement-targeted ads generated. So, losing a segment of user data as large as the population of the 27 EU countries could cause major problems for their continued growth. Meta therefore has a financial interest in giving in to the EU’s demands. In the third quarter of this year, 23.5% of its advertising revenue was generated by European users.

At the start of 2023, the EU Data Protection Commission asked Meta to ask users for consent before showing them personalized ads. It conceded the following November by introducing a subscription option removing targeted ads from Facebook and Instagram entirely for European users, starting at €13 per month on mobile. These fees were intended to recoup the financial losses that would result if many European users did not consent to targeted advertisements.

However, on July 1 this year, the European Commission ruled that this constituted a “Pay or consent” advertising model And violated the DMA as a preliminary. The authority claimed that Meta essentially “requires” users to consent to their data being used for advertising purposes and does not provide an equivalent service that is less personalized and free for those who do not consent.

SEE: Apple’s geo-blocking practices could violate EU rules

EU could impose heavy fines on Meta

If the preliminary findings are confirmed, Meta could face fines of up to 10% of its total global turnover – or 20% in the event of a repeat offense – likely a strong incentive to introduce its new advertising option this week. The Commission has until March 25, 2025 to deliver its verdict, but it is still unclear whether the less personalized advertising option will allow them to escape a fine.

Use of Facebook and Instagram data from previous browsing sessions to choose which ads to display. So even if users who opt for the less personalized tier only see ads based on their current session, that session could still be influenced by data collected in the past. This practice may not sit well with regulators.

Over the years, the DPC has Meta was fined several times for having violated GDPR rules based on its targeted advertising practices. In addition to the DMA and GDPR, Meta must comply with Digital Services Acta set of rules designed to regulate how “Very large online platforms“manage privacy, protect their users and operate transparently.

But it’s not just advertising data that is the subject of the war between Meta and the EU. In June, Meta delayed the training of its large language models on public content shared on Facebook and Instagram in Europe after regulators suggested it may be necessary to obtain consent from content owners. Meta AI, its AI border assistant, has still not been launched within the bloc due to its “unpredictable” regulations.

SEE: European AI law: the new European rules on artificial intelligence

Representatives from Meta, along with Spotify, SAP, Ericsson, Klarna and many others, signed an open letter in September to Europe. expressing concerns about “inconsistent regulatory decision-making.” It says interventions by European data protection authorities have created uncertainty over what data they can use to train their AI models.