Pay or Okay has already been scrutinized by the EU privacy machinery and deemed compliant with the GDPR. As we discuss in the Pay or Okay episode of the Mobile Dev Memo podcast, the Pay or Okay model is widely used throughout the EU in compliance with the GDPR, primarily by news publishers like Der Spiegel, Bild, and Zeit. The model has been interrogated under the restrictions of the GDPR and deemed permissible. The EC’s objection to Meta’s use of Pay or Okay hints at a vague interpretation of the DMA that proscribes the “accumulation of personal data by gatekeepers” that is absent in the text. Further, that nebulous aspiration orbits the regulatory influence of privacy, not competition, which is the DMA’s purview. By the same token: the EDPB, which enforces the GDPR, will issue guidance on Meta’s use of the Pay or Okay model imminently. Why would the EC need to investigate the model separately under the guise of competition concerns?
Eric Seufert
This article is highly misleading, all in the name of defending Meta’s advertising business and tracking practices. ‘Pay or Okay’ being adopted by some publishers does not mean it’s ‘widely’ used (notice how the only examples given are German newspapers, revealing that it’s not in fact that common throughout Europe); moreover, doing something in practice doesn’t make it compliant overnight – see how Uber, Lyft, and Airbnb regularly skirted local regulations to grow their platforms riding on the power imbalance between VC-backed US corporations and urban authorities.
The first sentence in this paragraph is promptly contradicted down the line: how can a practice be scrutinized by the EU privacy machinery and deemed compliant with the GDPR
, yet simultaneously awaiting guidance from the EDPB?! That opinion on consent or pay models has been released yesterday, and basically confirms that ‘Pay or Okay’ cannot be considered valid consent if these are the only two options presented to the user.
I have no doubt that Meta will devise new ways to delay and obfuscate the issue to protect their ad revenues. Their resistance to offering transparent consent is probably the best indication that they privately acknowledge that most people don’t want to be constantly tracked for the questionable benefit of personalized advertising, and that this business model is beneficial primarily to Meta, not to the general public.
The author also deliberately conflates Meta’s advertising model with advertising in general and thus wildly exaggerates when talking about ‘hostility’ towards a specific business model. GDPR only mandates explicit and free user consent for data tracking for personalized ads; it doesn’t prohibit data collection as long as the company makes the case to the customer that he will get added value in return. If Meta doesn’t have an argument to offer, well… that says more about Meta than about the regulation.
I suspect that Meta has other, less obvious reasons to persistently oppose user consent. In the recent AI craze, tech companies have been scrambling for input data to train their LLMs, and Meta is likely using user posts and photos for this purpose. As this is an entirely different use case from personalized ads, Meta would have to separately ask for consent for this AI training – and I would guess the public is even less willing to agree than for ads. So, to prevent that scenario, Meta has decided to fight tooth and nail against user consent altogether.
Ironically, there’s a privacy bill in the US congress that would introduce several provisions similar to GDPR: the American Privacy Rights Act would limit the data that companies can collect, retain and use to only what they need to provide their products and services
, and let Americans opt out of targeted advertising and view, correct, export or delete their data and stop its sale or transfer
. I’m sure Facebook’s lobbying is working overtime to prevent it or water down the text, but it would certainly be entertaining to see their reactions if this were to pass in the current form.
In the off chance that ‘Pay or Okay’ gets the green light eventually, Facebook’s pricing could also come under scrutiny. A reasonable price point could be the average revenue per user, which in Europe is significantly lower (in the range $5.8–$6.3 according to the latest Meta earnings) than the current fee of €12.99 per month with an additional €8 for each linked account. I have serious doubts about their reported amount though, since the fine print on their slide specifies that while ARPU includes all sources of revenue, the number of MAUs used in this calculation only includes users of Facebook and Messenger
– basically Meta is including Instagram and WhatsApp revenues in this metric, but discarding the users, leading to an inflated ARPU. Perhaps it considers these revenues negligible – for WhatsApp that might well be true – but in that case it should adjust the user figures accordingly.
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