Privacy

Meta’s EU ad-free subscription faces early privacy challenge

Comment

Image Credits: Bryce Durbin / TechCrunch

Meta’s shiny new bid to circumvent European Union privacy rules — by offering users a false choice between paying it a hefty monthly subscription for ad-free versions of Facebook and Instagram or agreeing to give up their privacy rights in exchange for free access to its social networks, meaning they will be tracked and profiled by the behavioral advertising giant — has been targeted with a complaint filed by privacy rights group noyb in Austria.

As soon as Meta’s plan to deploy a ‘pay or okay’ tactic to game a consent legal basis leaked to journalists last month noyb committed to fighting it “up and down the courts”. It’s making good on that pledge now by kicking off a challenge with Austria’s data protection authority.

Meta’s ad-free subscription for regional users has an initial cost of €9.99/month on web or €12.99/month on iOS or Android per linked Facebook and Instagram accounts in a user’s Accounts Center (with an additional fee of €6/month on web and €8/month on iOS or Android set to apply for each additional account listed in a user’s Account Center from March next year).

noyb contends that the cost of the subscription is “way out of proportion” to the value Meta derives from tracking users in the region — citing reporting by the company that the average revenue per user in Europe between Q3 2022 and Q3 2023 was just $16.79. That figure would equate to annual revenue of €62,88 per user — whereas Meta’s subscription puts a minimum annual cost for users on safeguarding their privacy of nearly €120, rising to over €250 for users who have both a Facebook and Instagram account.

The individual on whose behalf noyb has filed the complaint in Austria is in “financial distress” and receives unemployment assistance — indicating he cannot afford to splash out so much to protect his privacy. Commenting in a statement, noyb’s founder and chairman, Max Schrems, said: “More than 20% of the EU population are already at risk of poverty. For the complainant in our case, as for many others, a ‘Pay or Okay’ system would mean paying the rent or having privacy.”

noyb also contends that if other app makers were to adopt the same approach the cost for users to protect their privacy would further inflate — with EU citizens facing a “fundamental rights fee” that could stack up to several thousands of euros per year for people with an average number of apps installed on their phone.

“If Meta is successful in defending this new approach, it is likely to set off a domino effect,” it warns. “Already now, TikTok is reportedly testing an ad-free subscription outside the US. Other app providers could follow in the near future, making online privacy unaffordable.

According to Google, the average person has 35 apps installed on their smartphone. If all of these apps followed Meta’s lead and charged a similar fee, people would have to pay a ‘fundamental rights fee’ of €8,815.80 a year. For a family of four, the price of data privacy would rise to €35,263.20 per year — more than the average full-time income in the EU. Obviously, these figures become even more extreme in EU Member States with lower average incomes.”

Meta has pointed to a reference in a Court of Justice of the EU ruling from this summer, related to its legal basis for processing user data for ads, in order to justify charging a fee for a tracking-free product. However the Court caveated the possibility of it charging a fee for a tracking-free version of its product by stipulating any such charge would need to be “necessary” and “appropriate”.

noyb’s complaint appears to focus on the appropriateness of Meta charging users way more money to avoid its tracking than it earns per individual it tracks. Or, in short, the adtech giant has intentionally created a privacy rip-off in order to keep ripping off people’s privacy.

The EU’s General Data Protection Regulation (GDPR) sets out the conditions for what constitutes legally obtained consent to process personal data — which includes a hard requirement for consent to be “freely given”.

noyb’s argument boils down to demonstrating that such high financial cost represents an unobtainable bar on EU citizens being able to freely choose to obtain their fundamental right to privacy.

It also points to research which it says indicates the vast majority of people do not want their data to be used to target them with “personalizeds” ads — while other studies show people are overwhelmingly forced to consent to tracking when faced with paying a fee.

“Fundamental rights are usually available to everyone. How many people would still exercise their right to vote if they had to pay €250 to do so? There were times when fundamental rights were reserved for the rich. It seems Meta wants to take us back for more than a hundred years,” said Schrems.

“EU law requires that consent is the genuine free will of the user. Contrary to this law, Meta charges a ‘privacy fee’ of up to €250 per year if anyone dares to exercise their fundamental right to data protection,” added Felix Mikolasch, data protection lawyer at noyb, in another supporting statement. 

The privacy rights group is calling for Austrian’s DPA to instigate an urgency procedure to stop what it contends is Meta’s illegal processing on account of “the seriousness of the violations and unusually high number of users affected”. It is also urging the DPA to imposes a deterrent fine to make sure others do not seek to imitate Meta’s privacy rip-off.

Meta was contacted for a response to noyb’s complaint.

Spokesman Matthew Pollard pointed back to its earlier blog post — in which it defends the approach, claiming it’s compliant with EU laws. He also sent us this statement:

The option for people to purchase a subscription for no ads balances the requirements of European regulators while giving users choice and allowing Meta to continue serving all people in the EU, EEA and Switzerland. In its ruling, the CJEU expressly recognised that a subscription model, like the one we are announcing, is a valid form of consent for an ads funded service.

On the cost of the subscription, Pollard suggests Meta’s pricing is “in line” with other ad-free premium subs offered by streaming services — such as YouTube Premium, Spotify Premium, Netflix Standard and Twitch Turbo.

However these rivals don’t always offer blanket pricing across the EU, making comparisons challenging. (Additionally, Pollard’s comparative example cited UK pricing — a country that’s not even an EU Member State.)

Additionally, in the case of Spotify and Netflix, both are services that stream professional licensed content, making them a very poor comparison with Meta’s product given the adtech giant freely obtains content from users of Facebook and Instagram (it does not need to pay a licensing fee to users — but, hey, maybe it should?).

Even YouTube Premium provides paying customers with access to licensed content since it bundles YouTube Music. 

Pollard also included the social network Reddit in this list. However its ad-free Premium offer (which is priced at US$5.99pm) appears to be roughly half the cost of Meta’s web-based monthly subscription fee; and considerably more than its mobile pricing (Meta’s fees of €9.99pm/€12.99pm shake out to ~US$10.94/US$14.20). So it perhaps stands as a better example of the adtech giant inflating the fee it’s charging EU Facebook and Instagram users to obtain ad-free versions of its products. 

Artificially high pricing suggests these are products Meta doesn’t actually want anyone in the EU to pay for. Rather they are designed to force users of its mainstream social networks to keep letting it track and profile their online activity — so it can keep raking in billions from its advertiser customers.

Meta’s latest privacy rip-off will test the EU’s mettle for reining in Big Tech

Meta to offer ad-free subscription in Europe in bid to keep tracking other users

More TechCrunch

A Jio Financial unit plans to purchase customer premises equipment and telecom gear worth $4.32 billion from Reliance Retail.

Jio Financial unit to buy $4.32B of telecom gear from Reliance Retail

Foursquare, the location-focused outfit that in 2020 merged with Factual, another location-focused outfit, is joining the parade of companies to make cuts to one of its biggest cost centers –…

Foursquare just laid off 105 employees

“Running with scissors is a cardio exercise that can increase your heart rate and require concentration and focus,” says Google’s new AI search feature. “Some say it can also improve…

Using memes, social media users have become red teams for half-baked AI features

The European Space Agency selected two companies on Wednesday to advance designs of a cargo spacecraft that could establish the continent’s first sovereign access to space.  The two awardees, major…

ESA prepares for the post-ISS era, selects The Exploration Company, Thales Alenia to develop cargo spacecraft

Expressable is a platform that offers one-on-one virtual sessions with speech language pathologists.

Expressable brings speech therapy into the home

The French Secretary of State for the Digital Economy as of this year, Marina Ferrari, revealed this year’s laureates during VivaTech week in Paris. According to its promoters, this fifth…

The biggest French startups in 2024 according to the French government

Spotify is notifying customers who purchased its Car Thing product that the devices will stop working after December 9, 2024. The company discontinued the device back in July 2022, but…

Spotify to shut off Car Thing for good, leading users to demand refunds

Elon Musk’s X is preparing to make “likes” private on the social network, in a change that could potentially confuse users over the difference between something they’ve favorited and something…

X should bring back stars, not hide ‘likes’

The FCC has proposed a $6 million fine for the scammer who used voice-cloning tech to impersonate President Biden in a series of illegal robocalls during a New Hampshire primary…

$6M fine for robocaller who used AI to clone Biden’s voice

Welcome back to TechCrunch Mobility — your central hub for news and insights on the future of transportation. Sign up here for free — just click TechCrunch Mobility! Is it…

Tesla lobbies for Elon and Kia taps into the GenAI hype

Crowdaa is an app that allows non-developers to easily create and release apps on the mobile store. 

App developer Crowdaa raises €1.2M and plans a US expansion

Back in 2019, Canva, the wildly successful design tool, introduced what the company was calling an enterprise product, but in reality it was more geared toward teams than fulfilling true…

Canva launches a proper enterprise product — and they mean it this time

TechCrunch Disrupt 2024 isn’t just an event for innovation; it’s a platform where your voice matters. With the Disrupt 2024 Audience Choice Program, you have the power to shape the…

2 days left to vote for Disrupt Audience Choice

The United States Department of Justice and 30 state attorneys general filed a lawsuit against Live Nation Entertainment, the parent company of Ticketmaster, for alleged monopolistic practices. Live Nation and…

Ticketmaster antitrust lawsuit could give new hope to ticketing startups

The U.K. will shortly get its own rulebook for Big Tech, after peers in the House of Lords agreed Thursday afternoon to pass the Digital Markets, Competition and Consumer bill…

‘Pro-competition’ rules for Big Tech make it through UK’s pre-election wash-up

Spotify’s addition of its AI DJ feature, which introduces personalized song selections to users, was the company’s first step into an AI future. Now, Spotify is developing an alternative version…

Spotify experiments with an AI DJ that speaks Spanish

Call Arc can help answer immediate and small questions, according to the company. 

Arc Search’s new Call Arc feature lets you ask questions by ‘making a phone call’

After multiple delays, Apple and the Paris area transportation authority rolled out support for Paris transit passes in Apple Wallet. It means that people can now use their iPhone or…

Paris transit passes now available in iPhone’s Wallet app

Redwood Materials, the battery recycling startup founded by former Tesla co-founder JB Straubel, will be recycling production scrap for batteries going into General Motors electric vehicles.  The company announced Thursday…

Redwood Materials is partnering with Ultium Cells to recycle GM’s EV battery scrap

A new startup called Auggie is aiming to give parents a single platform where they can shop for products and connect with each other. The company’s new app, which launched…

Auggie’s new app helps parents find community and shop

Andrej Safundzic, Alan Flores Lopez and Leo Mehr met in a class at Stanford focusing on ethics, public policy and technological change. Safundzic — speaking to TechCrunch — says that…

Lumos helps companies manage their employees’ identities — and access

Remark trains AI models on human product experts to create personas that can answer questions with the same style of their human counterparts.

Remark puts thousands of human product experts into AI form

ZeroPoint claims to have solved compression problems with hyper-fast, low-level memory compression that requires no real changes to the rest of the computing system.

ZeroPoint’s nanosecond-scale memory compression could tame power-hungry AI infrastructure

In 2021, Roi Ravhon, Asaf Liveanu and Yizhar Gilboa came together to found Finout, an enterprise-focused toolset to help manage and optimize cloud costs. (We covered the company’s launch out…

Finout lands cash to grow its cloud spend management platform

On the heels of raising $102 million earlier this year, Bugcrowd is making good on its promise to use some of that funding to make acquisitions to strengthen its security…

Bugcrowd, the crowdsourced white-hat hacker platform, acquires Informer to ramp up its security chops

Google is preparing to build what will be the first subsea fiber-optic cable connecting the continents of Africa and Australia. The news comes as the major cloud hyperscalers battle it…

Google to build first subsea fiber-optic cable connecting Africa with Australia

The Kia EV3 — the new all-electric compact SUV revealed Thursday — illustrates a growing appetite among global automakers to bring generative AI into their vehicles.  The automaker said the…

The new Kia EV3 will have an AI assistant with ChatGPT DNA

Bing, Microsoft’s search engine, was working improperly for several hours on Thursday in Europe. At first, we noticed it wasn’t possible to perform a web search at all. Now it…

Bing’s API was down, taking Microsoft Copilot, DuckDuckGo and ChatGPT’s web search feature down too

If you thought autonomous driving was just for cars, think again. The “autonomous navigation” market — where ships steer themselves guided by AI, resulting in fuel and time savings —…

Autonomous shipping startup Orca AI tops up with $23M led by OCV Partners and MizMaa Ventures

The best known mycoprotein is probably Quorn, a meat substitute that’s fast approaching its 40th birthday. But Finnish biotech startup Enifer is cooking up something even older: Its proprietary single-cell…

Meet the Finnish biotech startup bringing a long-lost mycoprotein to your plate