Privacy group NOYB has hit Meta with yet another GDPR complaint. This time, it has highlighted the social media giant’s latest attempt to get around privacy laws by asking users to pay not to be tracked. It’s the latest attempt by Meta to circumvent GDPR and continue to monetise the personal information of users rather than treat customers fairly and in line with privacy laws across Europe.
According to Max Schrems, honorary chairman of NOYB, “Fundamental rights are usually available to everyone. How many people would still exercise their right to vote if they had to pay € 250 to do so? There were times when fundamental rights were reserved for the rich. It seems Meta wants to take us back for more than a hundred years.”
What is this about?
Like all social media sites, Meta needs advertising revenue to operate. As privacy laws have tightened, the opportunities to use Personally Identifiable Data (PII) to target advertising have diminished. Meta has tried several times to bypass GDPR and has been forced to continually backtrack.
This latest move sees Meta ask users to “either consent to being tracked for personalized advertising – or pay up to €251.88 a year to retain their fundamental right to data protection on Instagram and Facebook.”
For NOYB this is not just about the cost of not being tracked and having personal data used without consent. As NOYB states, “Under EU law, consent to online tracking and personalized advertising is only valid if it is “freely given”. This is to ensure that users only give up their fundamental right to privacy if it is their genuine free will to do so.”
There is a deeper issue here and that is the knock-on effect of Meta taking this action. According to NOYB, “If Meta gets away with this, competitors will soon follow in its footsteps. Given that the average phone has 35 apps installed, keeping your phone private could soon cost around €8,815 a year.”
Compounding this issue is the size of the fee. NOYB cites Meta’s own numbers that show the average user is worth just €62.88 per year in advertising revenue. Those figures come from reported revenue over the period Q3 2022 to Q3 2023. It amounts to around 25% of the amount Meta wants users to pay. It shows that this is about more than replacing lost ad revenue, and more about a new and much richer revenue stream for Meta.
An old problem in how to pay for free-to-air applications
The issue of how to pay for free-to-air applications is nothing new. In the late 90’s there were several emerging internet companies that toyed with the idea of a paid-for premium service and a free service. The former would have no adverts, while the latter would be advertising driven.
As mobile phones appeared, at least one Nordic carrier trialled free usage based on users accepting advertising to their devices.
When ad trackers first appeared a decade ago, advertisers and their industry associations promoted many an editorial lamenting the death of the free Internet if ad blocking was allowed.
All of this was before GDPR and regulators finally realised that privacy laws were urgently required. Unfortunately, the introduction of tighter privacy laws has only seen companies look for ways to avoid privacy and continue to monetise PII.
There is no question that if you want something for free, someone, somewhere, has to pay for it. The problem today, is we have a whole generation that has grown up expecting the Internet and apps to be free. The Internet is also considered by many to be a human right, especially as governments move everything online.
So how do we pay for the Internet? In the days of dial-up and per-minute calls, there was a revenue stream for the platforms and for the operators. Today, those charges might cover the network costs but fall billions short of covering costs for app development, administration, content controls and the physical infrastructure to run those apps.
Meta’s approach certainly isn’t the solution, but as NOYB points out, only “3 to 10 percent want personalized ads.” That is not enough people to persuade advertisers to pay for advertising and, presumably, pay at the level platforms want.
What else can be done?
Another model out there comes from X (formerly Twitter). You pay for different things that help extend your reach and amplify your message. If you don’t, your account reach is restricted. So far, there is no evidence that this is having a significant impact on revenue, but it is early days.
X has yet to take the Meta approach but its owner, Elon Musk, has already announced plans to harvest more PII from users. The only reason for that will be to sell it to advertisers although that is unlikely to stem the numbers that are leaving the platform for other reasons.
But what about charging a fee? Content walls have been around for a while and their effectiveness for news organisations and others has been limited. NOYB points to “the CEO of the “Pay or Okay” provider contentpass who stated that 99.9 % of visitors agree to tracking when faced with a € 1.99 fee.” In other words, users are willing to abandon their privacy to avoid paying.
Even where users pay a fee, there is no evidence that data is treated any better. So-called anonymisation is weak in most cases and easy to undo. The phrase that always causes a cringe moment is when people say pseudo-anonymisation. It means nothing when it comes to protecting data.
Governments are not going to pay as these are commercial companies and there is the problem word – commercial. The responsibility of any company, by law, is to maximise revenue for its shareholders. When the company cannot cover its costs, it cuts staff to the detriment of the customers and eventually goes out of business.
Enterprise Times: What does this mean?
There is no question that Meta is determined to explore every possible revenue stream to increase revenue. Privacy is an impediment to its ability to increase ad revenue. Since GDPR has come into force, the company has been found guilty of breaking the law over and over again. However, it is now running into increasingly stiffer objections from regulators and pressure groups.
The Irish DPO has long been accused of protecting Meta by being painfully slow in issuing fines and judgements. It has finally had to respond to pressure from other European data protection authorities and take action.
This latest case has been filed in Austria, but eventually, action will rest with the Irish DPO. What will it do? How long will it take to act? How many people will pay Meta in the vain hope that this will protect their data? More importantly, how long will it take before others follow Meta’s lead while waiting for action to be taken against it?
There are other questions though, that have to be considered as raised by contentpass. Do users really want to pay for privacy? Are they willing to give it up? Do they want to fight for it?
