Meta’s 2025 Personalized Ads Policy Costs and Compliance Issues with EU Digital Markets Act

Essential Insights

• Meta’s 2024 policy requiring EU users to either accept personalized ads or pay for ad-free Instagram and Facebook breaches the EU Digital Markets Act, according to preliminary findings from the European Commission.
• This policy was introduced in November 2023 as Meta’s response to the upcoming DMA enforcement but falls short of compliance.
• The policy restricts users from accessing a free service with reduced data usage or opting out of cross-platform data aggregation.

Meta Platforms (META) has implemented a controversial "pay or consent" advertising model on Instagram and Facebook, drawing scrutiny from the European Commission for violating the EU’s new Digital Markets Act (DMA). The DMA, effective since early 2024, aims to curtail the dominance of major tech gatekeepers including Meta, Google, Apple, Microsoft, Amazon, and ByteDance.

Policy Limits User Control Over Data, Says EU Commission

The European Commission’s statement highlights two core DMA violations in Meta’s approach: users cannot freely access a low-data, ad-supported version of the platforms, nor can they consent to the combination and processing of their personal data across Meta’s services. This restricts consumer choice and data privacy.

Commission Executive Vice President Margrethe Vestager emphasized, "Our investigation focuses on ensuring fair competition and empowering EU citizens to control their personal data and choose less intrusive ad experiences."

Meta’s November 2023 'pay or consent' framework is viewed as insufficient. The Commission has set a deadline until March 2025 for Meta to respond before issuing a final verdict.

Meta Maintains Compliance and Seeks Dialogue

A Meta spokesperson told ZAMONA, "Our subscription model aligns with European court rulings and complies with the DMA. We are committed to constructive engagement with the European Commission to resolve this investigation."

Should the Commission confirm violations, Meta faces fines up to 10% of its global revenue, with potential additional penalties for repeated breaches.

Recent EU actions include findings against Apple’s App Store and Microsoft’s bundling practices, signaling increased regulatory enforcement on tech giants.

Market impact: Meta’s shares dipped 1.5% to $496.59 as of Monday morning but have surged approximately 40% year-to-date.

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