Meta Platforms (META) could be slapped with daily fines from the European Union if its advertising model continues to breach competition rules. But the tech giant came out fighting, claiming that the warning meant Europe was “closed for business.”
Confident Investing Starts Here:
- Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions
- Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter
Non-Compliance
The European Commission said today that Meta is likely to only make limited changes to its pay-or-consent model, which may not be “sufficient to comply” with the Digital Markets Act (DMA).
“With this in mind, we will consider the next steps, including recalling that continuous non-compliance could entail the application of periodic penalty payments running as of June 27, 2025, as indicated in the non-compliance decision,” it said.
Daily fines for not complying with the DMA can be as much as 5% of a company’s average daily worldwide turnover.
The warning from the European Commission, which acts as the EU competition enforcer, came two months after it slapped a $234 million fine on the U.S. social media giant for breaching the DMA aimed at curbing the power of Big Tech.
Under the pay-or-consent model, EU users of Facebook and Instagram had a choice between consenting to personal data combination for personalized advertising or paying a monthly subscription for an ad-free service.
The Commission found that this model is not compliant with the DMA, as it did not give users the required specific choice to opt for a service that uses less of their personal data.
Moving the Goalposts
Meta robustly defended its position, accusing the Commission of discriminating against the company and of moving the goalposts during discussions over the last two months.
“A user choice between a subscription for a no-ads service or a free ad-supported service remains a legitimate business model for every company in Europe – except Meta,” a Meta spokesperson said. “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. This signals that the EU remains closed for business.”
Fellow tech titan Apple (AAPL) was fined €500 million back in April, accused of preventing app developers from directing users to cheaper deals outside the App Store.
Is META a Good Stock to Buy Now?
On TipRanks, META has a Strong Buy consensus based on 42 Buy, 3 Hold and 1 Sell ratings. Its highest proce target is $918. META stock’s consensus price target is $714.26 implying an 1.63% downside.
