Meta may offer ad-free subscriptions for Instagram and Facebook in the EU

Meta is considering paid versions of Facebook and Instagram that would feature no ads for users in the European Union, three people with knowledge of the company’s plans, a response to a regulatory review and a sign of how people live technology in the United States and Europe. may vary due to government policy.

Those who pay for Facebook and Instagram subscriptions won’t see in-app ads, said the people, who spoke on condition of anonymity because the plans are confidential. This could help Meta address privacy concerns and other scrutiny from European regulators by offering users an alternative to the company’s ad-based services, which rely on analyzing data from people, the sources said.

Meta would also continue to offer free versions of Facebook and Instagram with ads in the EU, the sources said. It’s unclear how much the paid versions of the apps would cost or when the company might roll them out.

A Meta spokesperson declined to comment.

For nearly 20 years, Meta’s core business has been providing free social networking services to users and selling advertising to businesses that want to reach that audience. Offering a paid tier would be one of the most concrete examples yet of how companies need to redesign their products to comply with data privacy rules and other government policies, especially in Europe.

In July, the EU’s highest court effectively barred Meta from combining data collected about users across its platforms – including Facebook, Instagram and WhatsApp – as well as external websites and apps, unless have received the explicit consent of the users. In January, the company was also fined €390 million by Irish regulators for requiring users to accept personalized ads as a condition of using Facebook.

These decisions stem from the enactment in 2018 of the European General Data Protection Regulation, or GDPR, which was landmark legislation aimed at protecting people’s online data.

Meta’s openness to creating paid subscriptions shows how people in the EU, which includes 27 countries and around 450 million people, could start seeing different versions of consumer tech products due to new laws, regulations and court decisions.

In recent weeks, as a new European law called the Digital Services Act has come into force to stem the flow of illegal content online, TikTok and Instagram users in the region have also been able to prevent the use of personal data. to generate their social media feeds. Snapchat and Meta have stopped marketers from targeting teenagers aged 13-17 in Europe with personalized ads.

Meta, which also owns Messenger, has come under particular scrutiny from European regulators. In May, the EU fined a Silicon Valley company 1.2 billion euros for violating its privacy laws by sending data on European citizens back to US servers in the purpose of improving the company’s advertising technology. Meta appealed the decision.

Meta was fined for other GDPR breaches, including a €265 million fine for a data breach in 2021. Irish regulators have also imposed fines of €225 million for breaches in a case involving WhatsApp, and an additional 17 million euros for data leakage.

Some Meta insiders believe giving users the choice to opt out of an ad-based service while still having access to a paid version of Facebook or Instagram could allay concerns from some European regulators, two people said. . Even if few people choose to use the paid version, making such an option available could serve Meta’s interests in the region, they said.

Meta has not released its new Threads app, which rivals X, formerly Twitter, in Europe due to regulatory issues.

Europe is the second most lucrative region for Meta after North America. Susan Li, Meta’s chief financial officer, said in April that advertising in the EU accounted for 10 percent of the company’s overall business. Meta’s revenue totaled nearly $117 billion last year.

Beyond its European challenges, Meta is trying to rejuvenate its business after global economic jitters hampered advertising sales growth. It also continues to promote its vision of the immersive digital world of the Metaverse, an expensive project championed by Mark Zuckerberg, the company’s chief executive, and still in its infancy. And executives are focused on developing AI technologies and integrating them into more Meta products.