{"id":20511,"date":"2025-07-03T06:35:32","date_gmt":"2025-07-03T06:35:32","guid":{"rendered":"https:\/\/scannn.com\/why-the-commissions-decision-undermines-the-goals-of-the-dma\/"},"modified":"2025-07-03T06:35:32","modified_gmt":"2025-07-03T06:35:32","slug":"why-the-commissions-decision-undermines-the-goals-of-the-dma","status":"publish","type":"post","link":"https:\/\/scannn.com\/lv\/why-the-commissions-decision-undermines-the-goals-of-the-dma\/","title":{"rendered":"Why the Commission\u2019s Decision Undermines the Goals of the DMA"},"content":{"rendered":"


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In April, the European Commission issued a <\/span>decision<\/span><\/a> stating that Meta\u2019s offering in Europe \u2014 allowing users to choose between an ad-free subscription and a free, ad-supported service \u2014 does not comply with the Digital Markets Act (DMA). This decision is both incorrect and unlawful, and we are appealing it.<\/span><\/p>\n

The Decision Ignores a Judgment by the Grand Chamber of the Court of Justice<\/b><\/h2>\n

The DMA introduced new rules for \u201cGatekeeper\u201d companies like Meta, including requiring GDPR consent in relation to DMA-specific personal data use for the delivery of ads (Article 5(2)).\u00a0<\/span><\/p>\n

On July 4, 2023 \u2013 before the Article 5 requirements came into force \u2013 the Grand Chamber of the European Court of Justice <\/span>declared<\/span><\/a> that a dominant company can obtain valid consent by offering users a choice between a subscription-based service and a free, personalised ad-supported service.\u00a0<\/span><\/p>\n

Yet the decision ignores this ruling. Instead, it claims that the CJEU\u2019s crucial judgment is not relevant and incorrectly concludes that Meta\u2019s user choice does not comply with the DMA. This stance is perplexing as the Commission is choosing to overlook a judgment by the highest court in the EU which is directly addressed at Meta, relates to the same data processing issues and specifically assessed our ads business model.\u00a0<\/span><\/p>\n

The decision also ignores the consistent support from other national courts and data protection authorities \u2013 <\/span>including in <\/span>France<\/span><\/a>, <\/span>Denmark<\/span><\/a> and <\/span>Germany<\/span><\/a> \u2013 for business models that provide a paid subscription alternative to consent for personal data use for personalised ads.<\/span><\/p>\n

The decision therefore runs counter to the CJEU judgment and precedents, and concludes that a business model that is relied on by many companies across Europe is not available to Meta. Effectively, Meta is the only company in Europe unable to offer both a subscription-based and a free ad-supported service. Instead, Meta is required to offer a free, reduced ads service \u2013 less personalized ads \u2013 that leads to poorer outcomes for users, advertisers, and platforms.<\/span><\/p>\n

The Decision Ignores Commercial Realities and Imposes a Reduced Ads Service that Must be Offered for Free<\/b><\/h2>\n

The decision mandates that Meta must offer a less personalized ads service for free, disregarding cost, impact, or effectiveness, and imposes a potentially unviable business model. This overlooks the commercial reality that, in a market economy, Meta deserves fair compensation for the valuable and innovative services that users choose to use \u2013 a principle essential to sustaining innovation and economic growth.\u00a0<\/span><\/p>\n

However, the Commission insists that Meta must \u201cdemonstrate\u201d its \u201centitlement to consideration\u201d for its services (rec. 108), based on the rationale that social media is \u201cintegral\u201d to the daily lives of EEA citizens. Yet other services that some may describe as \u201cessential\u201d \u2013 such as those provided by telecom, news media, and broadband providers \u2013 are not expected to be free.\u00a0<\/span><\/p>\n

The Decision Ignores the Negative Impact of LPA on Users and Advertisers<\/b><\/h2>\n

Evidence <\/span>shows<\/span><\/a> that our personalized advertising services were linked to \u20ac213 billion in economic activity and 1.44 million jobs across the EU in 2024, driving growth and competitiveness across the European economy.<\/span><\/p>\n

However, despite the economic value that our services drive for European businesses, the Commission demanded that we offer less personalized ads for free.\u00a0 In response to those demands, we <\/span>launched<\/span><\/a> Less Personalized Ads (LPA) in November 2024. LPA uses almost 90% less data than personalized ads \u2013 and this has consequences in terms of the user experience and returns for advertisers. Meta is being forced to offer ads that are far less relevant to users compared to personalized ads, resulting in less user engagement, less sales, and in turn less revenue for European businesses<\/span><\/p>\n

More specifically, early feedback on LPA shows negative outcomes for our users. LPA leads to an almost 800% rise in ads being closed for reasons such as being \u201cirrelevant\u201d or \u201crepetitive,\u201d highlighting a significantly poorer user experience.\u00a0\u00a0<\/span><\/p>\n

It also leads to poorer outcomes for EU advertisers, with European Small and Medium-sized Enterprises (SMEs) being the most impacted. SME advertisers \u2013 the vast majority of our advertiser community \u2013 rely on direct response advertising which is no longer effective with LPA. Early feedback shows that LPA leads to fewer transactions \u2013 less personalized ads achieve 70% fewer onsite conversions and 61% fewer offsite conversions compared to our personalized ads. Despite numerous advertisers flagging these concerns to the Commission, they seem to have been ignored.\u00a0<\/span><\/p>\n

By reducing the efficiency of personalized ads, the Commission\u2019s decision actually undermines the goals of the DMA \u2013 it creates uncertainty and hinders new European entrants\u2019 ability to monetize through traditional methods, while weakening a key marketing strategy for newcomers and creating a degraded user experience.<\/span><\/p>\n

The Decision Undermines Constructive Regulatory Dialogue<\/b><\/h2>\n

Our constructive engagement \u2013 which pre-dated the launch of any investigation \u2013 was publicly noted by the Commission.\u00a0 Yet as 2024 progressed, the goalposts kept shifting and that has continued into 2025. We made proposals but feedback has often not been forthcoming. If feedback was received, it was often inconsistent and untethered from the DMA text. Meanwhile, despite the significant investment that we made to comply and address the Commission\u2019s varying feedback, it kept repeating that it would never be in a position to bless DMA compliance proposals.\u00a0<\/span><\/p>\n

This raises serious questions about whether there is substance to the Commission\u2019s repeated claims that the DMA is not about fines, but about participative regulatory dialogue and compliance. Now is the time for key stakeholders \u2013 including the industry and the Commission \u2013 to demonstrate what meaningful regulatory dialogue looks like\u00a0 and how we can all contribute to a return to a better system of regulation. That is in the interests of Europe and European consumers and businesses, and would be true to the goals of the DMA. <\/span><\/p>\n<\/p><\/div>\n