Meta, formerly known as Facebook, has announced that it will be introducing a subscription fee for users in Europe who want an ad-free experience on its platforms. Starting in November, this subscription will cost €9.99 ($10.60) per month for web users and €12.99 ($13.79) for mobile app users. Initially, one subscription will cover all accounts linked to the owner. However, from March 2024, an additional fee will be charged for each extra account, amounting to €6 ($6.37) per month for web and €8 ($8.49) for mobile.
This move comes as Meta aims to comply with European Union regulations. In May, the EU fined the company $1.3 billion for violating its data privacy rules by transferring user data from Europe to the US. As a result, the EU prohibited Meta from using user data across its platforms for targeted ads without explicit consent. In August, Meta announced changes to its practices to align with Europe’s General Data Protection Regulation regarding consent issues.
During Meta’s recent earnings call, Bank of America analyst Justin Post inquired about the company’s potential subscription offering and its compliance with GDPR in Europe. While Meta CFO Susan Li did not provide many details, she mentioned that the company was working on a consent model for ads in Europe.
While Meta’s subscription plan in Europe arose from a legal battle, it raises the question of whether entirely subscription-based social media platforms, which were previously free, could become more prevalent. One example is X, formerly known as Twitter, which is currently testing a $1 yearly fee for new users in the Philippines and New Zealand. This fee grants access to basic functions such as reposting, liking, and replying to posts. X’s owner, Elon Musk, believes this approach will help eliminate spam accounts and bots from the platform. Musk has also suggested the possibility of making X a completely paywalled platform.
Despite the legal challenges, Meta reported a 23% increase in ad revenue for the quarter ending in September compared to the same period last year. However, the company remains cautious about ad sales in the fourth quarter due to the ongoing Israel-Hamas war.
In conclusion, Meta’s decision to introduce subscription fees for European users seeking an ad-free experience is a response to EU regulations and the fines imposed on the company. This move raises questions about the future of free social media platforms and the potential for more subscription-based models.
