Meta may charge Instagram users in Europe a $14 per month subscription fee unless they opt in to targeted ads, according to The Wall Street Journal. In addition, it may impose a combined monthly fee of $17 for ad-free access to Facebook and Instagram on desktop.
Last month, rumors surfaced that Meta would start forcing subscriptions on users who opted out of targeted ads, but the potential fees were unknown. Users willing to pay would see no advertising on Facebook and Instagram, while those who want to stick to the free version would have to consent to be targeted by ads based on their personal data. The company has reportedly discussed the plans with regulators in Brussels and Ireland.
The move comes in response to a court ruling in July finding that Facebook must gain the consent of users to access their personal data. That court said that site operators have to prove that users willingly gave permission, possibly by allowing them to reject ad tracking. That's exactly what Apple did with iOS 14, and with very few users opting in, Meta predicted a significant hit to its revenue. In its ruling, the EU court also said companies should explore subscription models for users.
If accurate, the numbers revealed by the WSJ are just a bit less than Netflix charges in the EU for it's regular monthly plan. With only power social media users or companies likely willing to pay that, Meta could effectively force regular users to accept targeted ads or stop using its social media sites altogether.
Earlier this year, the EU hit Facebook with a record €1.2 billion ($1.3 billion) fine for transferring EU user data to the US, in violation of the bloc's key digital privacy rules. And the rules are about to tighten more, as Europe's Digital Markets Act (DMA) regulations come into force starting in March 2024.
At the same time, Meta makes nearly a quarter of its revenue in Europe, with the bloc accounting for $7.2 billion of its $32 billion total in the second quarter this year. And the company has yet to launch its Twitter rival, Threads, in Europe due to uncertainty over the DMA and whether it can connect the app to Instagram as it does elsewhere. With all that, Meta's plans for all its apps in the EU should become more concrete over the coming months before the new rules arrive in force.