Meta Slams EU As ‘Closed For Business’ After $200M Fine, Warning of Daily Penalties

The European Commission slapped a $234 million fine on Meta Platforms (META) on Friday, ruling that the platform’s ‘Consent or Pay’ model violates the EU’s Digital Markets Act. It also warned that the company has 60 days to bring the model into compliance, or it could face additional daily fines. 

Meta, meanwhile, accused the Commission of unfair treatment and shifting the goalposts during two months of negotiations that led to the €200 million fine.

"At a time when there are growing voices across Europe to change direction and focus on innovation and growth, this signals that the EU remains closed for business," a Meta spokesperson said. "A user choice between a subscription for no ads service or a free ad supported service remains a legitimate business model for every company in Europe - except Meta." 

Despite the EU’s ruling, Meta’s stock edged 0.7% higher in Friday morning trade. However, retail sentiment around the company on Stocktwits remained in ‘bearish’ territory over the past 24 hours despite ‘high’ levels of chatter.

In its statement, Meta maintained that its current model complies with the Digital Markets Act (DMA). "We are confident that the range of choices we offer people in the EU doesn't just comply with what the EU's rules require - it goes well beyond them," the spokesperson said.

According to the European Commission, there were two key problems with Meta’s ‘Consent of Pay’ model. One was the lack of a truly equivalent choice. The Commission said that users were not offered a free, less personalized, yet comparable version of the service as required by EU law.  

It argued that most people would naturally choose the free options, giving Meta consent under pressure, which raises the second issue that consent wasn’t given freely. The Commission said that there’s an imbalance of power between Meta and its users since refusing consent means paying a fee. 

The EU is still reviewing Meta’s 'free with less tracking’ option, which was introduced in November last year, and is yet to decide whether that version complies with the rules. 

Meta Platform’s stock has gained over 23% this year and more than 43% over the past 12 months. 

(Exchange rate: €1 = $1.17)

For updates and corrections, email newsroom[at]stocktwits[dot]com.

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