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Meta's pay-or-consent model hides 'massive illegal data processing ops': lawsuit

(2024/02/29)


Consumer groups are filing legal complaints in the EU in a coordinated attempt to use data protection law to stop Meta from giving local users a "fake choice" between paying up and consenting to data collection.

Essentially, as any of our readers based in the European Union, European Economic Area (EEA) or Switzerland who dabble in Facebook and Instagram will know, Mark Zuckerberg's company has been rolling out changes to the service in the EU since late last year.

Those of us with aunties on FB or friends on Instagram were asked to say yes to data processing – to "choose to continue to use Facebook and Instagram with ads" – or to pay up for a "subscription service with no ads on Facebook and Instagram." Meta, of course, made the changes in an attempt to comply with EU law.

[1]

But privacy rights folks weren't happy about it from the get-go, with privacy advocacy group noyb (None Of Your Business), for example, sarcastically noting Meta was basically proposing you pay it in order to enjoy your fundamental rights under EU law. The group already challenged Meta's move in [2]November , arguing EU law requires consent for data processing to be given freely, rather than to be offered as an alternative to a fee. Noyb also filed a lawsuit in [3]January this year in which it objected to the inability of users to "freely" withdraw data processing consent they'd already given to Facebook or Instagram.

[4]

[5]

Complaints filed by eight European Consumer Organisation (BEUC) members today are based on European data protection law, the General Data Protection Regulation (GDPR) rather than on consumer laws; [6]previous complaints by the group of 19 focused on Meta's commercial practices, which they said were unfair because it "misleads" consumers into thinking that "by opting for the paid subscription as it is presented, they get a privacy-friendly option involving less tracking and profiling." Those consumer suits also argued that the platforms' market dominance meant users didn't really have a choice.

Today's GDPR complaints from BEUC argue that Meta's pay-or-consent model breaches data protection principles of the law, including the principles of purpose limitation, data minimisation, fair processing and transparency, with said processing enabling the company to "infer private details about the consumer."

[7]

The group also claim Meta has no valid legal basis under the GDPR for its data processing for advertising because it relies on consent. It also claims Meta cannot "account for the lawfulness of its processing for content personalisation" because the social media giant doesn't make it clear that its purpose is necessary for the relevant contract or that the "profiling" is consistent with the principle of data minimisation. Lastly, the Euro groups are claiming in their complaints that the model is inherently unfair because of a "lack of transparency, unexpected processing, [the] use of its dominant position to force consent, and switching of legal bases in ways which frustrate the exercise of data subject rights."

Each of the groups is expected to file with its own national data protection watchdog today.

[8]Norway wants Facebook behavioral advertising banned across Europe

[9]Meta's data-hungry Threads skips over EU but lands in Britain

[10]Meta promises UK it won't pilfer rivals' ad data to build Facebook Marketplace

[11]Latest antitrust problem the EU has with Meta? It's classified

Meta told The Reg it disputes the allegations, adding that it takes "our regulatory obligations extremely serious and are confident that our approach complies with GDPR."

It added that it believes Meta's "Subscription for no ads" model "addresses the latest regulatory developments, guidance and judgments shared by leading European regulators and the courts over recent years. Specifically, it conforms to direction given by the highest court in Europe: in July, the Court of Justice of the European Union endorsed the subscriptions model as a way for people to consent to data processing for personalised advertising."

The lawsuits are the latest in a run for Meta, which has been struggling to conform with EU legislation. Last year it copped a [12]record €1.2 billion GDPR fine from Ireland's Data Protection Commission for "systematic, repetitive and continuous' transfer to the US of data belonging to EU residents."

[13]

The social media giant was also forced to wait until December last year to launch its Twitter rival, Threads, in the European Union – a [14]full five months after its release in the rest of the world. The delay, which Meta chalked up to the "unique regulatory requirements" in the bloc, can't have helped it in the race to ramp up traction in the space, as Bluesky and Mastodon vie to snatch Twitter's market share after Elon Musk's company [15]made access to Twitter/X's API unaffordable for many.

It's not for nothing that every Meta SEC filing states under Risk Factors that "government restrictions on access to Facebook... or other actions that impair our ability to sell advertising in their countries" could be a problem for the social media giant. And most recently, the EU's Digital Markets Act and Digital Services Act are keeping the GDPR company after joining that disclaimer in its SEC filings.

Still, it's not hurting too badly, judging by Meta's financials. On February 1, 2024, Meta issued its "first-ever quarterly cash dividend." Meta made $131.948 billion of its $134.9 billion topline in fy2023 from advertising.

Meta said in a [16]10K earlier this month that its Family of Apps segment (Facebook, Instagram, Messenger, WhatsApp, and other services) revenue in 2023 had increased by $18.56 billion, or 16 percent, compared to 2022, noting that: "The increase was almost entirely driven by advertising revenue." ®

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[1] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_security/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2ZeC4OGT@GgReI3ybYSYFmQAAAVY&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0

[2] https://www.theregister.com/2023/11/28/metas_eu_privacy_fee_triggers/

[3] https://www.theregister.com/2024/01/23/meta_eu_advertising/

[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_security/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZeC4OGT@GgReI3ybYSYFmQAAAVY&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0

[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_security/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZeC4OGT@GgReI3ybYSYFmQAAAVY&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0

[6] https://www.beuc.eu/choose-to-Lose-with-Meta

[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_security/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44ZeC4OGT@GgReI3ybYSYFmQAAAVY&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0

[8] https://www.theregister.com/2023/09/29/norway_facebook_behavioral_ads/

[9] https://www.theregister.com/2023/07/05/threads_comes_to_uk/

[10] https://www.theregister.com/2023/05/26/meta_facebook_marketplace_cma/

[11] https://www.theregister.com/2022/12/19/latest_antitrust_problem_european_commission/

[12] https://www.theregister.com/2023/05/22/dpc_fines_meta_12b_tells/

[13] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_security/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33ZeC4OGT@GgReI3ybYSYFmQAAAVY&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0

[14] https://www.theregister.com/2023/07/05/threads_comes_to_uk/

[15] https://www.theregister.com/2023/04/20/twitter_microsoft_api/

[16] https://www.sec.gov/ixviewer/ix.html?doc=/Archives/edgar/data/1326801/000132680124000012/meta-20231231.htm#ibbcdb9a98fd34a92b3add929872a8009_31

[17] https://whitepapers.theregister.com/



basically proposing you pay it in order to enjoy your fundamental rights under EU law

heyrick

There are numerous websites in France that follow this model - accept all cookies/adverts/tracking or subscribe...

Re:numerous websites in France that follow this model

Mage

Which is illegal.

Other people breaking the law doesn't make it OK for Meta.

Re: Re:numerous websites in France that follow this model

Jimmy2Cows

I think that's heyrick's point; the French sites are also acting illegally At least that's how I read it.

Re: Re:numerous websites in France that follow this model

Anonymous Coward

It's not illegal. "Pay or Okay" was also allowed by the AEPD (Spanish regulator) which [1]followed the French regulator's lead , as did the German regulator. The Spanish regulator gave a date for any organisation which wanted to convert to "Pay or Okay" - that was the 11th of January. Low and behold, most of the Spanish press did that. The big newspapers each charged their own individual subscription fees, the smaller media outlets set up a common platform where paying one subscription got you access to all of them.

National EU regulators capitulated to national press lobbying and Facebook are simply citing precedent saying what's good for national press outlets is equally good for them. [2]Now it's up to the EDPB to say to Facebook "what you're doing is already allowed, carry on" or find against the national regulators that are already allowing this . The EDPB is all the national regulators in the EEA, many of whom don't want to lose face doing a volte-face.

This does not affect UK-GDPR so oddly enough UK-GDPR is now better than GDPR in that respect.

[1] https://blog.didomi.io/pay-or-okay-breaking-down-the-paywall-situation-in-2024

[2] https://cybernews.com/news/meta-privacy-policy-edpb-gdpr/

Re: basically proposing you pay it in order to enjoy your fundamental rights under EU law

Jimmy2Cows

UK too. Or have to toggle off a thousand individual "legitimate interest" options, which are presented in a separate tab to the main cookies options.

Some sites are getting better though, with "Reject All" for cookes and "Object All" for legitimate interset. But the default state is usally everything on, and you have to opt out, which is contrary to the rules.

They need to start enforcing some of this and making a strong example of some offenders.

Re: basically proposing you pay it in order to enjoy your fundamental rights under EU law

b0llchit

The number of sites operating in violation of EU law does not mitigate the seriousness of the transgression(s). Actually, it just makes it more grotesque.

But the real killer here is that there is no enforcement .

This is one of these cases where I'd like to see reversal of burden of proof. Every website should publicly proof their complete and correct handling of any data within EU law. The proof and trail leading to it should be accessible by any person in the EU without any limitations. Failure to do so should automatically cause the company to be shuttered and prevented from doing any business, anywhere.

Re: basically proposing you pay it in order to enjoy your fundamental rights under EU law

Tim 11

I can't imagine EU law does gives you the fundamental right to enjoy any service you like without paying for it.

Tom 38

asked to say yes to data processing – to "choose to continue to use Facebook and Instagram with ads" – or to pay up for a "subscription service with no ads on Facebook and Instagram." Meta, of course, made the changes in an attempt to comply with EU law.

But privacy rights folks weren't happy about it from the get-go, with privacy advocacy group noyb (None Of Your Business), for example, sarcastically noting Meta was basically proposing you pay it in order to enjoy your fundamental rights under EU law.

I don't quite understand this. What fundamental right is this? Why aren't Facebook allowed to monetize their users? There are three choices, "pay for Meta", "allow Meta to show advertising", or "don't use Meta". Why do they have to provide a fourth option "Use Meta for free and opt out of tracking"?

I'm going to get downvotes for this for sure... its not like I'm on Meta's side here, but I just can't understand why they aren't allowed to choose the conditions in which users access Meta.

Pay for Meta vs free

Mage

You can't offer free and insist on tracking.

They are indeed welcome to make it a pay only site. And then the only "tracking" that can be imposed is the log-in cookie.

It's not about the adverts or being a pay walled site as such.

Jonathon Green

Facebook are welcome to monetise all of their users.

They can still sell and serve advertising, they just aren’t allowed to use non consensual intrusive data gathering to (allegedly) improve the targeting of that advertising.

Obviously they’ve so far managed to persuade advertisers that non-targeted advertising is less valuable and they might have to develop a pricing model which reflects that, but, on the basis of what the current model puts in front of me that would probably be more reflective of its actual value to the advertiser… :-)

Blazde

Perhaps they can charge extra for non-targetted because it "increases the likelihood your ad is seen by the select demographic of our most privacy-conscious users"?

Try car manufacturers..

Anonymous Coward

I'm presently looking at a car brand that requires three separate logins to be created to use its vehicles in full, one of which is for Google.

What they're trying to do is to slope-shoulder their GDPR requirements whilst offering Google in the dashboard, but the direct implication is that they're selling cars with features that require you to part with your privacy before you can actually use them or suffer reduced functionality. None of that is in the glossy brochures or made clear at the point of purchase, which amount to forced disclosure which just happens to be illegal under GDPR. Add to that a very liberal use of 'legitimate interest' in their privacy statements (read; enthusiastic abuse of a backdoor that can only have been the result of heavy lobbying because it basically neutralises your protection, with offenders likely to claim "wir haben es nicht gewußt" when caught) and frankly, they should be made to complain about toilet brushes because they hurt.

I know Mozilla did a study of car privacy, but that was very US centric. Maybe there's a need for one on this side of the pond because we're definitely on a road to nowhere here.

Don't Understand....................

Anonymous Coward

Why is "advertising" being elided with "data theft"?

To be more precise, these two things are absolutely NOT RELATED:

(1) Meta pushes advertising to its customers

(2) Meta reads and stores and sells data extracted from customer transactions

Item #1 has nothing to do with GDPR.

Item #2 is illegal.

So....Meta customers might pay to switch off item #1......so what?

Re: Don't Understand....................

Jellied Eel

It's a simple bait & switch-

...which they said were unfair because it "misleads" consumers into thinking that "by opting for the paid subscription as it is presented, they get a privacy-friendly option involving less tracking and profiling."

If people opt to pay to get an ad-free FaceMelta experience, they should be free to do so. They should also be free to opt out of FaceMelta's cyber stalking and data rape, as is a requirement under GDPR. Don't pay and get raped is extortion, plain and simple.

Problem is they've been allowed to get away with it. So I was just thinking about how to solve this problem, admittedly in the context of energy policy and discovered-

Cape Enniberg, Faroe Islands, 750 m above North Atlantic

Which I propose naming the Cliffs of Stupidity. Build 3 walls leaving the cliff side open, secure those. Then place FaceMelta execs, and other assorted lying scumbags inside. This isn't capital punishment given they're free to make a choice. Put video feeds on PPV, or just have those ad funded and it would quickly pay for itself. The prospect of a meaningful punishment might also discourage other data rapists and assorted scumbags.

Re: Don't Understand....................

Helcat

You are correct on #1 and #2, but this is an issue with #3:

Meta are providing a free service conditional to consent to tracking.

GDPR requires users be able to revoke consent at any time.

Forcing a user to pay to revoke consent is the breach of GDPR as a) some users may not have the facility or funds available at that time, b) making a payment requires provision of sensitive information that has to be processed and stored (not subject to GDPR - it's a legal requirement) and the user may not want to provide those details.

Now, if Meta provided their service free with adds, but they didn't track the user - that would be fine. It's the forced consent for tracking that's the problem.

I'm starting to think GDPR has failed

I ain't Spartacus

it's an ongoing battle. Legislation, government and the law all take their own sweet time. So I may be wrong - but the feeling I'm getting is that there'll be all these cases at the edges, and no major effect.

Facebook were allowed to build a global face-recognition system right under our very noses, with barely a peep from anybody. They never got consent for it, they just suddenly said, "we can tag your photos" and users lapped it up. Nobody did very much of anything, and even with our new data laws, this doesn't appear to be an area of policy interest. Who knows who else has got access to that - it's probably all been sold into AI models - and every government who wants it.

Then we have the incredibly creepy data-theft that Facebook do whenever they get their claws into someone's phone. Put the app on there, and your contacts have gone off to Facebook HQ to allow them to associate even more data. A friend today got one of those friend recommendations on FB. For a bloke she met on an online dating site a couple of years ago. Presumably he's just pub FB on his phone, it's taken their two numbers and put them back in touch.

When I used Facebook my account was on an old email address. But I started getting friend links to people I knew. I'm guessing through some association of friends' gobbled data with them also having my actual email address - I guess Facebook were able to connect the dots and then find other people who had mine in their address books. Not a problem for me. I only used a different email because I'm awkward - and I barely used it for friends (I was on there for family stuff). But it's a lot more worrying for people with reason to need privacy, and it's the sort of creepiness that these laws should be addressing, and really don't seem to have made a dent in this business model from Google, Facebook et al.

Tracking != advertising

Filippo

There's a fundamental misunderstanding here. One that Meta is doing their very best to exploit.

Tracking is not advertising.

The GDPR is about tracking, not ads. You can serve ads on a web page without tracking, it's how it was done in the 90s. If you do, GDPR won't stop you in the least.

If Meta wants to offer a paid service with no ads, good for them, but that's irrelevant. If they want to be compliant that way, they need to offer a paid service with no tracking . But they don't want to do that, because tracking is where they make their real money.

After all, it takes a global-scale service like Meta or Google to make tracking really useful... but anyone can serve untracked ads with equal effectiveness. If it got established that you can't track users without informed consent, and you can't leverage refusal of service to gain consent, and this was actually enforced, then the advertising monopoly would dissolve overnight. Even the argument that tracking is useful for users in the form of better search result is hollow in the face of how web search results on major sites are steadily getting worse .

So they're trying to muddle the issue by saying "oh, but we offer an ad-less service, so that's fine!" - no, it's not fine, we're talking about tracking, not ads. Even offering a service where the ads don't target me is irrelevant, as long as you keep tracking me.

Conflating tracking and advertising, believing that they are one and the same, that you can't advertise without tracking and that therefore the only way to fund a website is either through payment or through tracking, is IMHO a big part of how we got into this mess, and furthering this confusion is outright deceptive on Meta's part.

There's also the not-insignificant problem that, at this point, even if Meta offered a paid track-less service, nobody in their right mind would trust them to actually not take your money and then track you anyway.

Terence, this is stupid stuff:
You eat your victuals fast enough;
There can't be much amiss, 'tis clear,
To see the rate you drink your beer.
But oh, good Lord, the verse you make,
It gives a chap the belly-ache.
The cow, the old cow, she is dead;
It sleeps well the horned head:
We poor lads, 'tis our turn now
To hear such tunes as killed the cow.
Pretty friendship 'tis to rhyme
Your friends to death before their time.
Moping, melancholy mad:
Come, pipe a tune to dance to, lad.
-- A. E. Housman