It looks like Meta’s strategy of charging European Facebook and Instagram users, for the privilege of not being tracked for ad-targeting purposes, ain’t gonna fly.
Meta introduced the subscriptions late last year in an attempt to grapple with the implications of a bombshell July ruling by the EU’s highest court, which found that Meta had no legal basis for tracking its users across its services and third-party sites unless it got their express consent to do so. But privacy advocates swiftly complained, arguing that it’s not real consent if the only alternative is shelling out yet another monthly subscription fee—originally as much as €12.99 ($13.82) for an account used on both mobile and the web, before Meta last month proposed a drop to €5.99 as a way of mollifying its critics.
Today, Politico first reported that the European Data Protection Board (EDPB)—the umbrella organization for the EU’s various privacy regulators—had decided that the privacy advocates complaining about what they derisively called Meta’s “pay or okay” model had a point.
“In most cases, it will not be possible for large online platforms to comply with the requirements for valid consent if they confront users only with a binary choice between consenting to processing of personal data for behavioral advertising purposes and paying a fee,” the EDPB said in its opinion, published later in the day.
EDPB Chair Anu Talus said platforms “should give users a real choice when employing ‘consent or pay’ models,” adding: “The models we have today usually require individuals to either give away all their data or to pay. As a result most users consent to the processing in order to use a service, and they do not understand the full implications of their choices.”
“Overall, Meta is out of options in the EU,” said Max Schrems, the Austrian activist lawyer whose 13-year legal crusade against Meta is what gradually removed those options, in a statement. “It must now give users a genuine yes/no option for personalized advertising. It can still charge pages for reach, engage in contextual ads and alike—but tracking people for ads needs a clear ‘yes’ by users.”
Meta has tried using various legal justifications for scooping up and processing European users’ personal data over the years since the General Data Protection Regulation (GDPR) came into force in 2018—with each being successively shot down by regulators as being an unacceptable reading of the privacy law. First Meta claimed that this tracking was part of its user contract, then that it had a “legitimate interest” in conducting targeted advertising, and now that it’s getting genuine consent from those who choose to avoid the new fees.
Schrems claimed that the introduction of subscription fees as the alternative increased the proportion of people agreeing to be tracked from 3% to over 90%. “You don’t need a lawyer to see that it’s not ‘freely given’ consent,” he said. “In fact, five years after the GDPR came into force, this is just the latest ‘trick’ to undermine EU law or at least delay compliance for a few more years.”
Meta did not respond to a request for comment from Fortune.
In other European regulatory news, Apple’s latest beta version of iOS makes it possible for EU iPhone users to directly download apps from developers’ websites, rather than having to use an app store. Originally reported by MacRumors, that is part of Apple’s tortuous journey toward compliance with the new Digital Markets Act, a blockbuster antitrust law. There are conditions, though, including Apple’s insistence that apps can only be eligible if they’ve already had at least a million first installs on iOS in the EU, in the previous year.
Meanwhile, the European Commission is miffed that TikTok launched a new “TikTok Lite” app in France and Spain before conducting a legally required risk assessment about its potential impact on young people’s mental health, in particular “potential stimulation of addictive behavior,” Reuters reports. The app, which is supposed to be for over-18s, rewards its use with points that can be exchanged for Amazon vouchers and the like. TikTok—which the Commission is already formally investigating under the new online-content law known as the Digital Services Act—now has all of one day to submit that risk assessment. Oops.
More news below.
David Meyer
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NEWSWORTHY
AMD’s latest AI play. AMD has introduced new AI-capable processors for business laptops and mobile workstations, with HP and Lenovo already lined up as customers. As CNBC reports, the Ryzen Pro 8040 Series provides a counterpart to the desktop-bound Pro 8000 series, which AMD revealed in January. Both lines are rivals to Intel’s latest Core Ultra chips and to an extent Nvidia’s new GeForce RTX 4080 GPUs, which are also aimed at the AI PC market. The new category of PC will run certain AI workloads, like summarization and translation, locally rather than requiring the cloud.
ASML miss disappoints. ASML, the Dutch maker of essential chipmaking equipment, has disappointed investors with its new orders for the first quarter—€3.6 billion ($3.8 billion) rather than the €4.63 billion they had been expecting. As Bloomberg reports, its shares fell as much as 6.4% on the news, though they did recover slightly to a loss of around 4%. ASML, for which China remains the biggest customer despite the export controls placed on the country, said it expects demand to pick up later this year.
A16z raises $7.2 billion. Andreessen Horowitz has raised another $7.2 billion, which it will invest through multiple new funds. As the Financial Times notes, this is one of the biggest VC fundraisings since the recent downturn. Just over half the cash will go to later-stage startups, while $1.25 billion will be invested in AI infrastructure firms and $1 billion in AI applications.
ON OUR FEED
1 billion
—The number of monthly active users that Telegram will reach within a year, according to founder Pavel Durov. The app apparently has 900 million monthly active users at the moment.
IN CASE YOU MISSED IT
Apple CEO Tim Cook says ‘we’re investing’ in Indonesia fresh off his pledge to spend more on Vietnam suppliers, continuing his Southeast Asia charm offensive, by Nicholas Gordon
Dermatologists say girls are getting rashes and worse from beauty products pitched by influencers and that it ‘needs to be addressed’, by Alexandra Sternlicht
The U.S. is reportedly preparing to sue Ticketmaster over the monopolistic behavior that outraged Swifties last year, by Sunny Nagpaul
Facebook and Instagram’s response to deepfake porn is under review by its Oversight Board, by Chris Morris
Cheap electric cars are finally here—but price cuts won’t translate to more sales until infrastructure catches up, experts say, by Dylan Sloan
Junior analysts, beware: Your coveted and cushy entry-level Wall Street jobs may soon be eliminated by AI, by Sydney Lake
BEFORE YOU GO
Farewell, Atlas. Boston Dynamics is retiring its YouTube-star humanoid robot known as Atlas, which it created for a Department of Defense competition back in 2013. The Verge, which notes that Atlas isn’t a commercial robot like Boston Dynamics’ Spot dog and Stretch warehouse worker, provides a nice rundown of the various tricks we’ve seen Atlas perform over the years, from gymnastics to tool-bag-tossing.
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