Meta is again reimagining its plans for serving personalized advertising in the EU. The latest change in direction stems from ongoing scrutiny from EU regulators over whether the proposed consent-or-pay advertising scheme for EU-based Facebook and Instagram users violates the EU General Data Protection Regulation and the Digital Markets Act.
Meta's new plan will still incorporate an ad-free subscription at a lower cost, but it also introduces a free model characterized as serving "less personalized ads" with consent. The new option will focus on contextual advertising generated by content viewed during a singular browsing session. Meta will not employ broader user profiling to serve ads.
"This is the second time in a year we have made significant changes to our business model in the EU to address regulatory feedback, which is testament to our commitment to complying with evolving EU regulations and offering people control over their experiences," Meta said in a statement, also noting it will "remain steadfast in our view that personalized ads are the best experience for people and businesses."
The less personalized advertising option is proposed as focusing on context, but Meta added that it will still use a "minimal set of data points" that include age, gender, location and details on user ad engagement.
The latest change comes approximately a year after Meta caught regulators' attention with its plan to offer ad-free Facebook and Instagram services in the EU under a subscription model. It was a response in part to a January 2023 ruling from Ireland's Data Protection Commission that Meta could no longer rely on contractual necessity or legitimate interests as a legal basis for serving personalized ads.
The concept also sprung questions regarding the ethics and fairness around users having to pay for privacy, as well as whether a paid subscription would ensure proper purpose limitation under the GDPR.
In its statement, Meta indicated it believes it had complied with all legal questions from regulators, which allegedly raised "additional demands" that "go beyond what is written in the law."
The European Data Protection Board ruled to ban Meta's original behavioral advertising practices November 2023 before issuing a nonbinding opinion April 2024 against pay-or-consent plan, explaining "it will not be possible for (large online platforms) to comply with the requirements for valid consent." EDPB Chair Anu Talus said at the time that consumers must be given "a real choice" if a platform plans to deploy a pay-or-consent model.
In response to Meta's new plan, Talus welcomed the fresh take with expanded options while touting the harmonization within cross-border and cross-sectoral enforcement that led to additional user choice.
"Under the new digital market regulations, we will see more and more that a single topic is tackled at the same time by different regulators, making cross-regulatory cooperation a key aspect of our way of working," Talus said, adding the EDPB is still working on guidelines for pay or consent with a "broader scope" that will be discussed at an 18 Nov. stakeholder forum.
Advertising landscape shifts again
Meta and other Big Tech platforms have long been trailblazers in the digital space, with smaller companies falling in line with Big Tech practices where applicable. Regulators' work toward tamping down pay-or-consent models could be viewed as means to tame an issue that could have run rampant in the advertising technology space.
Meta's fresh perspective on advertising and user consent potentially opens another new paradigm for the advertising technology industry. Tobias Judin, head of international at Norway's data protection authority, Datatilsynet, told the IAPP the plan is a "significant step in the right direction."
"The binary nature of the pay-or-consent model was what made it so controversial in the first place, so we are pleased to note a shift towards increased choice for users," Judin said. "If done right, this could be a game changer."
Judin and Datatilsynet were at the forefront of the regulator red flags around Meta's advertising regime, placing a country-wide ban July 2023 that was affirmed and applied across the EU and the European Economic Area by the EDPB months later.
According to Judin, no final determinations have been made on the legality of Meta's new plan and that will only come "in cooperation with our European counterparts." However, the close attention Judin and his office have paid to the issue extends them a unique window into Meta's advertising overhaul, which he said may finally meet the mark.
"From what we understand, the new option introduced appears to be less intrusive, and we appreciate Meta considering regulators’ feedback," he said. "At the same time, it is important to note that other (non-advertising) content is still very reliant on profiling, and such other content will provide the basis for any contextual ads."
The addition of a "less personalized" option may bring further questions on Meta's characterizations of necessity and proportionality, according to AWO Senior Associate Nick Botton. He said potential ambiguity around data Meta might connect with user ad engagement could be problematic.
"'Less personalized,' to me, means that the use of personal data should be strictly limited to what is necessary to provide the service and to deliver ads — for example, a user’s IP address," Botton said. "Ads should be personalized only based on a user’s stated preferences what they said they want to receive ads about) and the context next to which an ad appears."
Privacy advocacy group NOYB has also been following the pay-or-consent evolution and filed litigation against Meta's prior plans. NOYB Honorary Chair Max Schrems is far from sold on the newest plans.
"Overall this just looks like another attempt to ignore EU law by annoying people into consent with huge unskippable ads," Schrems said in a statement. "Users must have an equal choice between ads that use their personal data and ads that do not. We doubt that Meta's fourth iteration of trying to bypass EU law will be accepted."
Joe Duball is the news editor for the IAPP.
