European Commission Charges Meta and X with Violations of Online Services Laws

By‎ Adv. Dotan Hammer

Partner at the Cyber, Privacy & Copyright Group, Pearl Cohen Zedek Latzer Baratz

By‎ Adv. Shaked Feldman Yiftah
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The European Commission has notified Meta of its preliminary finding that the company’s “Subscription for no ads” advertising model does not comply with the Digital Markets Act (DMA). This model forces EU users of Facebook and Instagram to choose between paying a monthly subscription fee to access an ad-free version or using a free version with personalized ads.

The DMA requires dominant online platforms, called gatekeepers, to offer users more choices and ensure fair competition by restricting extensive data collection. It mandates that gatekeepers obtain user consent to combine personal data across services. If users decline, they must still receive a less personalized but equivalent alternative. The Commission has preliminarily concluded that Meta’s “Subscription for no ads” advertising model fails to offer a less data-intensive alternative to personalized ads and does not allow users to freely consent to data combination.

Non-compliance can result in fines of up to 10% of the gatekeeper’s global turnover, rising to 20% for repeated offenses. For systematic non-compliance, the Commission may require the sale of business parts or ban further acquisitions.

Meanwhile, X, formerly known as Twitter, is alleged to have breached the Digital Services Act (DSA) by misleading users with its blue checkmark. These charges, the first issued under the DSA, follow a seven-month investigation by the European Commission. The DSA mandates that large online platforms and search engines take greater responsibility for tackling illegal content and ensuring public safety.

The EU’s preliminary findings criticized X for using “dark patterns” to manipulate user behavior, lacking transparency in advertising, and limiting data access for researchers. The Commission pointed out that X’s verified accounts with blue checkmarks do not conform to industry standards, hindering users’ ability to make informed decisions about account authenticity. Additionally, X failed to maintain a searchable and reliable advertisement library and blocked researchers from accessing public data.

X now has several months to respond and could face fines of up to 6% of its global turnover if found in violation of the DSA.

Click here to read the Commission’s press release on its preliminary findings regarding Meta’s “Pay or Consent” model for breaching the DMA.