Get Ready, Everybody. The E.U. is About to Do Something Stupid.
Foo Yun Chee, reporting for Reuters:
Meta Platforms and other large online platforms should give users an option to use their services for free without targeted advertising, EU privacy watchdog the European Data Protection Board said on Wednesday.
The EDPB’s opinion came after it was asked by national privacy regulators in the Netherlands, Norway, and Germany to look into consent or pay models adopted by large online platforms such as Meta.
“If controllers do opt to charge a fee for access to the ‘equivalent alternative’, they should give significant consideration to offering an additional alternative. This free alternative should be without behavioural advertising,” EDPB said in a statement.
The board’s ruling on Wednesday gives the European Commission, the European Union’s executive body, the ability to force Meta and “other large online platforms,” like Google, to provide their services for free without any targeted advertising. In other words, this outlandish decision allows the commission to dictate how a corporation makes money, even if the “recommended” method is non-viable. The non-technical equivalent of this ruling is the government telling a baker they can’t price their bread at $5 because it thinks that is too expensive. The government doesn’t actually know that the ingredient cost per loaf is $4.75, but it also doesn’t care to find out, so it just punishes the baker for selling the bread at a 25-cent profit even though the baker needs the 25 cents to continue their operations. It is entirely unfair.
The European Commission has been waiting on this ruling since March so it can begin to force Meta to offer non-targeted advertising for free, instead of forcing consumers to subscribe to the ad-free versions of Instagram and Facebook as Meta currently does in response to the Digital Markets Act, which went into effect in early March. E.U. users can choose to pay Meta 10 euros (around $11) monthly to remove all ads — including the targeted ones — because the bloc’s DMA forces “Big Tech” to offer users the ability to disable targeted advertising somehow. The subscription is Meta’s way of sneaking around the true intention of the legislation, which is for companies to offer a simple toggle switch for users to disable targeting for free. The commission didn’t like Meta’s clever idea, so it complained to the EDPB, which, naturally, ruled in the commission’s favor.
It’s important to keep in mind that the DMA does not specifically state that this scheme — which is known as a “pay or OK” tactic inside Brussels — is illegal, or that it shouldn’t be employed. The law simply requires there to be some way for users to opt out of targeted advertising, even if that method is asking for payment since the legislation says nothing about payment entirely. But commissioners, prominently Margrethe Vestager, the commission’s antitrust chief, have decided Meta’s perfectly legal compliance with the DMA is too unacceptable, so they have begun re-interpreting the law to enforce it at their whim. It’s the same old tactic the European Union has been playing for months. As I wrote in March, the commission is “playing a one-sided, rigged game while laughing manically in the corner at everyone falling face-flat on the ground.”
Back to Wednesday: Now, with pesky legality out of the way, the commission is free to push Meta against the wall and choke its neck until it offers its services practically for free, since Meta’s primary revenue source is effective advertisement targeting. Without targeted advertisements, Meta’s average revenue per user drops significantly since advertisers want to ensure their products get placed in front of prospective buyers’ eyes — but thanks to the European Union, if Meta wants to continue operating in the bloc, it needs to take a loss on offering services to Europeans. And if Meta does the algebra and determines it’s not worth it to stay in the European Union, the commission will surely take Meta to court for leaving for it being somehow anti-consumer, even though it’s the commission’s fault in the first place for forcing the company to leave.
The only way for Meta to remain profitable in the European Union is for the company to inundate users with terrible advertisements in the hopes that it can make up for the lack of targeted advertising by simply selling more advertisements at a lower price. That move, however, would also probably draw the ire of regulators in Brussels, who clearly have nothing better to do than go after technology companies which not one ordinary European is complaining about. Europeans can already opt out of targeted advertising for free by using App Tracking Transparency, Apple’s technology for disguising a tracking identifier companies like Meta use to keep track of users across the web. But privatization does not seem to be in the commission’s interests, so it has instead opted to bully any company doing business in its sacred bloc for no reason other than politics. Is there seriously no way for Europeans to object to this madness?