In response to mounting regulatory pressures in Europe, Meta Platforms (META.O.) is actively considering the introduction of ad-free subscription plans for users of its popular social media platforms, Instagram and Facebook. Two sources with knowledge of the matter revealed this development on Tuesday, shedding light on the company’s strategic move to comply with stringent European Union (EU) regulations.
The proposed subscription plans are designed to offer European users an alternative to the current ad-supported model, allowing them to access these platforms without being exposed to personalized advertisements. The move comes as Meta faces increasing scrutiny over its data privacy practices and the use of user data for ad targeting without explicit consent.
Pricing Plans and Timeline
Several pricing plans were reportedly under discussion within the company, but sources indicate that a 10 euro ($10.49) per month subscription plan appears to be the most viable option. The sources also suggest that the ad-free subscription service could be rolled out in the coming months, though a specific timeline was not provided.
Notably, the introduction of ad-free subscriptions aims to align Meta with EU regulations that seek to curtail the company’s capacity to personalize ads for users without their explicit consent, thereby safeguarding user privacy. By providing users with the choice between a free, ad-supported plan and a paid subscription, Meta hopes to maintain regulatory compliance while preserving its significant advertising revenue streams.
Additional Costs on Mobile Devices
For users accessing the ad-free experience on mobile devices, the subscription price would see a slight increase to approximately 13 euros. This adjustment is attributed to the inclusion of commissions charged by Apple’s and Google’s respective app stores, according to one of the sources.
Comparatively, this subscription fee places Meta’s offering in the same price range as popular content streaming services. For instance, Netflix (NFLX.O) charges 7.99 euros for its basic subscription plan, while Alphabet’s (GOOGL.O) YouTube Premium is priced at about 12 euros, and Spotify’s (SPOT.N) Premium service costs around 11 euros.
Regulatory Backdrop
Meta’s decision to explore ad-free subscriptions in Europe follows a hefty 390 million euro fine imposed earlier this year by Ireland’s Data Privacy Commissioner. The company was informed that it could no longer use the “contract” as a legal basis for sending users ads based on their online activity.
In response to this regulatory setback, Meta announced its intention to seek explicit consent from EU users before allowing businesses to target ads to them, demonstrating its commitment to adapting to evolving regulatory requirements in the region. A spokesperson from Meta conveyed the company’s belief in “free services supported by personalized ads” while emphasizing the exploration of options to ensure compliance with evolving regulations.
When approached for comments, Meta, Ireland’s Data Protection Commission, and the European Commission all declined to provide statements on the matter.
As Meta takes this significant step to offer ad-free subscriptions in Europe, the company seeks to strike a delicate balance between preserving its advertising revenue streams and addressing the growing demand for user privacy protection in the EU market. The coming months will likely see how users respond to this new option and how it impacts Meta’s bottom line.