Meta is reportedly considering a move to a bifurcated ‘pay or okay’ model for its Facebook and Instagram services: (1) an ad-free subscription based model (for a fee); or (2) an ad-funded model where users will be shown personalised advertising when they use the service (the status quo).
The potential move comes off the back of a CJEU decision in Case C-252/21 which (amongst other things) calls into question Meta’s ability to rely on legitimate interests for processing personal data to provide users with personalised ads on the services – the upshot being that Meta needs to obtain consent for that processing. You can read more about that case here.
If the reports are correct, the move will mark a significant shift for Meta and may pave the way for other players in the online advertising ecosystem (and beyond) that grapple with the need to obtain user consent.
Pay or okay models have traditionally been regarded as non-compliant with the GDPR, as they are seen as a form of ‘forced consent’. However, the CJEU has opened the door to such a model. As a starting point, the Court said that, for consent to be valid, users should be free to refuse processing operations “without being obliged to refrain entirely from using the service”; however, the Court went on to say that this may be fulfilled by offering a paid-for version “if necessary for an appropriate fee”.
However, if the move does go ahead, we can expect it to be challenged. NOYB says that the CJEU’s commentary around pay or okay models was obiter dictum (and therefore not legally binding), that such models are a ‘loophole’, and that fundamental rights should not be for sale (we should not have to pay for privacy, any more than we should to vote or exercise freedom of speech). However, such arguments ignore that the fundamental rights to privacy and data protection are not absolute, and must be balanced against other rights such as Meta’s freedom to conduct a business (which is also recognised as a fundamental right under the EU’s Charter of Fundamental Rights). Of course, users can choose to not use the service at all. It will be interesting to see where the CJEU lands on this tension.
Finally, it’s worthwhile noting that this potential change will likely not apply to the UK market; recent changes to Meta’s terms of service for WhatsApp (also following regulatory action – see here) have applied only to the EU market. We therefore expect that Meta will continue to take a divergent approach here.
The CJEU said that the alternative to ads must be 'necessary' and the fee must be 'appropriate'. I don't think € 160 a year is what they had in mind. These six words are also an 'obiter dictum', a non-binding element that went beyond the core case before the CJEU. For Meta this is not the most stable case law and we will clearly fight against such an approach (Max Schrems)