Introduction:
The European Data Protection Board (EDPB) has released new guidance that will have significant implications for adtech giants like Meta and other large platforms. The guidance outlines how privacy regulators should interpret the General Data Protection Regulation (GDPR) in relation to the “consent or pay” model that many platforms use. This model, which forces users to consent to tracking and profiling or pay a subscription fee for an ad-free experience, is now under scrutiny due to concerns about an imbalance of power and the lack of a genuine choice for users.
The Imbalance of Power:
According to the EDPB, using a “consent or pay” model can lead to negative consequences and an imbalance of power between individuals and data controllers. When platforms offer a binary choice between consenting to data processing for behavioral advertising or paying a fee, users often feel compelled to consent without fully understanding the implications. The EDPB emphasizes the need for platforms to provide users with a real choice when it comes to their privacy.
Alternative Approaches:
The EDPB suggests that large online platforms should consider offering alternative models that do not require payment or extensive data processing for behavioral advertising. These alternatives could include contextual advertising or advertising based on topics selected by the user. While platforms are not obligated to offer services free of charge, providing these alternatives enhances users’ freedom of choice and makes it easier for controllers to demonstrate that consent is freely given.
The Impact on Meta and Similar Platforms:
Meta, as the owner of Facebook and Instagram, is particularly affected by this guidance since it has been using a “consent or pay” model since November 2023. The EDPB’s opinion raises doubts about the viability of Meta’s business model, as it highlights the risks associated with such models and calls for an equivalent alternative that does not involve payment or extensive data processing.
Meta’s Response:
Meta spokesperson Matthew Pollard downplayed the EDPB’s guidance, stating that the subscriptions model is a legally valid way to seek consent for personalized advertising. He referred to a ruling by the Court of Justice of the European Union (CJEU) that did not explicitly rule out the possibility of charging for a non-tracking alternative. However, the EDPB emphasizes that the CJEU’s ruling was not central to its determination and that circumstances must be present for a fee to be imposed.
No Clear Resolution:
While the EDPB’s guidance provides detailed analysis and suggests alternatives to the “consent or pay” model, it does not unequivocally state that this model is illegal. Privacy rights nonprofit noyb argues that Meta can no longer rely on this tactic, but founder Max Schrems believes that the EDPB should have been more explicit in declaring the model illegal. The Board plans to develop further guidelines on consent or pay models with a broader scope, which will be closely watched by the media industry.
Conclusion:
The EDPB’s guidance on the “consent or pay” model challenges the practices of adtech giants like Meta by calling for a genuine choice for users and the provision of alternative models. While the impact on Meta and other platforms remains uncertain, the guidance signals a shift towards protecting user privacy and promoting transparency. As EU data protection regulators continue to analyze and respond to the guidance, it is clear that platforms will need to reevaluate their data processing practices to comply with GDPR requirements and address concerns about an imbalance of power.