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Wednesday, June 19, 2024

Meta Considers Offering Ad-Free Experience to Instagram and Facebook Users in Europe for a Fee

As a response to regulatory scrutiny and a sign that the ways in which people in the United States and Europe experience technology may diverge as a result of government policy, Meta is reportedly considering paid versions of Facebook and Instagram that would have no advertising for users in the European Union.

The sources spoke on the condition of anonymity because the plans are classified, but they confirmed that subscribers to Facebook and Instagram will not be subjected to adverts inside the applications. As an alternative to the company’s ad-based services, which depend on analysing people’s data, this might help Meta fight off privacy concerns and other scrutiny from E.U. authorities, the sources said.

According to the sources, Meta would also keep the free ad-supported versions of Facebook and Instagram available in the European Union. When or if the corporation plans to release premium versions of the applications is unknown.

Offering free social networking services to consumers and selling advertising to businesses seeking to reach those users has been Meta’s primary business model for almost 20 years. One of the most concrete instances of how corporations are having to restructure goods to comply with data privacy standards and other government policies may be seen in the proposal of a paid tier, which is especially relevant in Europe.

Meta was essentially prohibited in July by the highest court in the European Union from aggregating user data acquired across its platforms (including Facebook, Instagram, and WhatsApp) and from other websites and applications without user agreement. Forcing users to accept personalised advertising as a condition of accessing Facebook resulted in a 390 million euro punishment for the firm from Irish authorities in January.

The decisions originated from the General Data Protection Regulation (GDPR) that was passed in Europe in 2018 to safeguard individuals’ personal information.

In light of recent legislation, regulatory changes, and judicial decisions, consumers in the European Union (EU), which consists of 27 nations and over 450 million people, may start to see variants of consumer technology goods like Meta’s paid memberships.

Users in the European Union (EU) have had the option to prevent their personal data from being used to produce social media feeds since the Digital Services Act went into force in recent weeks. Thanks to Snapchat and Meta, advertisers in Europe may no longer specifically target teens between the ages of 13 and 17.

The Digital Markets Act, another European Union regulation focusing on technology, will go into force the following year. That will have far-reaching effects, such as Apple finally allowing European Union customers to download App Store alternatives on iPhones and iPads. It will also require large tech platforms to adapt some business practises in order to boost competition.

Meta, the parent company of Messenger, has come under intense investigation from European Union authorities. To improve its advertising technology, the Silicon Valley firm was fined €1.2 billion in May after it was found to have violated European Union privacy regulations by transferring user data to servers in the United States. Meta has filed an appeal.

Other General Data Protection Regulation fines for Meta totaled €265 million, including one for a data breach in 2021. Irish authorities have fined WhatsApp $225 million for breaches in that country’s case and another €17 million for a data leak.

Two of the individuals familiar with Meta’s thinking speculated that appeasing European authorities may include allowing users to opt out of an ad-based service while still having access to a premium version of Facebook or Instagram. They argued that providing a paid alternative would benefit Meta in the area even if few users actually took use of it.

Due to regulatory concerns, Meta has delayed the launch of Threads, a competitor to X (previously Twitter), in Europe.

After North America, Europe is Europe’s most valuable location for Meta. In April, Susan Li, Meta’s chief financial officer, revealed that the company’s advertising in the EU accounted for 10 percent of revenue. Last year, Meta’s sales was close to $117 billion.

Meta is attempting to revitalise its company overall, not just in Europe, after global economic uncertainty stunted ad sales growth. Mark Zuckerberg, the business’s CEO, has been a strong advocate for a costly project aimed at creating an immersive digital environment called the metaverse, and the corporation is currently in its early stages of developing this ambition. In addition, company leaders are working to advance AI technology and integrate them into more of Meta’s offerings.

David Faber
David Faber
I am a Business Journalist of The National Era
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