Meta Platforms Inc., the parent company of Facebook and Instagram, announced its plans to offer users in Europe the option to access the social media platforms without advertisements through a subscription service. This decision comes in response to increasing regulations and court rulings regarding data privacy and user protection.
Starting from November, European users will have the opportunity to subscribe to Facebook and Instagram for a monthly fee of €9.99 ($10.57) via the web, or €12.99 per month through mobile operating systems like Apple Inc.'s iOS and Android. These subscription services will be available to users in the European Union as well as Iceland, Liechtenstein, Norway, and Switzerland.
The move towards subscription services is primarily influenced by recent legal ramifications surrounding the collection and usage of user data by social media companies. In July, the European Court of Justice ruled against Meta Platforms Inc., stating that companies should consider providing alternative, data-free services to customers who do not wish to have their data collected and shared with advertisers, even if it requires a fee.
While Meta Platforms Inc. remains an advocate for an ad-supported internet, the company expressed its commitment to comply with evolving European regulations regarding user data. In a statement, the company explained, "We respect the spirit and purpose of these evolving European regulations and are committed to complying with them."
In response to the subscription service announcement, Meta Platform's shares rose by up to 1.9% to $302.40 in premarket trading. The decision to offer ad-free versions of their platforms is seen as a strategic move to cater to users who value privacy and control over their data.
The subscription service will not replace the ad-supported version of the platforms, which will continue to be available in these markets without an additional charge. Initially, the subscription fees will cover all user accounts. However, starting in March, Meta Platforms Inc. intends to introduce an additional charge of €6 per month for web users and €8 per month for mobile users for each additional account.
This decision by Meta Platforms Inc. reflects the increasing scrutiny faced by major tech companies from European regulators. In the European Union especially, fines worth billions of euros have been imposed on companies for non-compliance with data protection rules, and new regulations surrounding competition and content moderation are being implemented.
Furthermore, the company has also decided not to launch its messaging app, Threads, in the European market. This decision is driven by concerns over whether Threads can adhere to the EU's Digital Markets Act, which restricts major tech companies from sharing data between services.
Meta Platforms Inc. has assured its stakeholders that the new European subscription model has been taken into account in their recent business outlook and guidance. This move signifies the company's commitment to navigating the evolving regulatory landscape while providing users with alternative options to manage their data privacy on social media platforms.