Meta has warned that European users may face a "materially worse" experience on its platforms following a major regulatory blow from the European Commission under the Digital Markets Act (DMA).

 

The social media giant, which owns WhatsApp, Instagram, and Facebook, recently rolled out a controversial "consent or pay" model. This requires users to either pay a subscription or allow Meta to combine personal data across its platforms for targeted advertising.

 

However, last week the European Commission (EC) fined Meta €200 million, stating that the model violates the DMA by not offering genuine consent options. The EC ruled that users must be able to use Meta’s services without being forced to trade their personal data.

 

In its latest earnings report, Meta acknowledged it may need to modify its approach, warning that such changes could "result in a materially worse user experience for European users" and significantly impact both its revenue and European operations as early as the third quarter of this year.

 

“This could remain in effect while we appeal,” the company stated.

 

Some analysts suggest the company may be trying to rally public support against the regulatory changes. Eric Seufert of Mobile Dev Memo noted:

 

“Meta is likely aiming to turn EU users into vocal critics of this regulatory regime by showing how it degrades the overall product.”

 

The Commission is also currently reviewing an alternative ad model that Meta introduced last year, which the company claims relies on less personal data for ad targeting.

 

Meanwhile, Meta is facing regulatory heat not only in Europe but also in the US. The Federal Trade Commission (FTC) has taken the company to court, alleging that it holds a social media monopoly by acquiring Instagram and WhatsApp, which stifled competition.

 

Despite the legal and regulatory turmoil, Meta continues to post strong financials. The company’s quarterly earnings beat Wall Street expectations, largely due to robust advertising revenue and increased user engagement. Daily active users jumped by 6%.

 

Meta CEO Mark Zuckerberg highlighted the company’s focus on AI in his statement:

 

“We’re making good progress on AI glasses and Meta AI, which now has nearly 1 billion monthly active users.”

Matt Britzman of Hargreaves Lansdown added:

 

“Meta has gone full throttle on investments in AI, and these results show the platform’s grip on users remains strong.”

 

The EC has given Meta 60 days to comply with its decision, failing which the company may face additional fines.

 

For any enquiries or information, contact info@thelawreporters.com or call us on +971 52 644 3004. Follow The Law Reporters on WhatsApp Channels