Meta has cautioned that European users could face a diminished experience on its platforms following a €200 million fine from the European Commission over data privacy concerns.
The warning came after the European Commission ruled that Meta's "consent or pay" model violated the Digital Markets Act (DMA). This model required users to either pay a monthly subscription or allow Meta to combine their data from Facebook and Instagram.
"Based on feedback from the EC in connection with the DMA, we expect we will need to make some modifications to our model," Meta stated in its quarterly earnings report. The company indicated these changes could substantially impact both user experience and revenue in Europe as early as the third quarter of 2024.
The European Commission has given Meta 60 days to comply with the DMA requirements or face additional penalties. The regulatory body maintains that the current model does not allow users to freely consent to how their personal data is used.
Industry analyst Eric Seufert suggests Meta's public warning could be a strategic move to rally user support against increasing regulatory oversight. "What they ultimately want to do is turn public opinion against this regulatory regime which will demonstrably degrade the product offerings that are available to EU residents," he explained.
Despite regulatory challenges, Meta reported strong quarterly earnings that exceeded market expectations. CEO Mark Zuckerberg highlighted the company's progress in AI development and noted continued community growth across its platforms, which include Facebook, Instagram, and WhatsApp.
The company is currently evaluating an alternative advertising model that claims to use less personal data, which is under review by the European Commission.