The European Commission is preparing to fine Meta up to $1 billion for alleged violations of the Digital Markets Act (DMA), according to sources.
Regulators argue that the company’s ‘pay or consent’ model for Facebook and Instagram advertising restricts consumer choice, forcing users to either pay a subscription fee or consent to extensive data tracking—an approach the EU says conflicts with digital competition rules.
Under the DMA, the European Commission can impose fines of up to 10% of a company’s global annual revenue for violations. If found guilty, Meta’s penalty could exceed the reported $1 billion figure. The company is expected to challenge the decision, with CEO Mark Zuckerberg and U.S. government officials already voicing strong objections to the EU’s regulatory actions.
Regulators Target Meta’s Advertising Model
The European Commission has been investigating Meta’s subscription-based alternative to targeted advertising since its launch in late 2023. Under this system, users in the European Economic Area must either pay €9.99 per month on the web (€12.99 on mobile) to remove ads or agree to extensive data collection for personalized advertising.
Following regulatory pressure, Meta lowered the fee to €5.99. However, privacy advocates argue that the issue is not just about pricing but about fundamental user rights.
According to the European Commission’s preliminary assessment from 2024, “Meta’s “pay or consent” model may not provide a real alternative in case users do not consent, thereby not achieving the objective of preventing the accumulation of personal data by gatekeepers.”
Meta’s History of EU Fines and Legal Challenges
This latest enforcement action would follow a string of previous fines against Meta for breaching EU competition laws. In November 2024, the European Commission imposed a €797.72 million fine on the company for tying Facebook Marketplace to its core social media platform. Regulators found that automatically integrating Marketplace into Facebook gave Meta an unfair distribution advantage, harming competition in the online classifieds sector.
Previously, in May 2023, Meta faced a record-breaking €1.2 billion fine under the GDPR for transferring European user data to the United States without adequate protections. These cases, along with the latest DMA dispute, highlight the increasing regulatory pressure Meta faces in Europe.
Political Tensions Over the EU’s Regulatory Crackdown
Meta is not the only company under scrutiny. The European Commission has also launched investigations into Google and Apple for potential DMA violations, warning that both companies could face fines of up to 10% of their global revenue if found guilty of favoring their own services.
The regulatory crackdown has sparked tensions between the EU and the United States. U.S. President Donald Trump has criticized the EU’s actions in memorandum issued in February, calling them “overseas extortion” against American tech firms. Zuckerberg has aligned himself with this view.
Speaking on the Joe Rogan Experience podcast on January 11, Zuckerberg criticised the EU’s regulatory actions, which have resulted in more than €30 billion in fines for US tech firms over the past two decades.
Despite the political controversy, EU officials insisted that their focus is on ensuring fair competition and protecting consumer rights. The Commission stated in January, that it temporarily paused DMA investigations, including those involving Apple and Google, citing the need for a broader strategy review.
What Comes Next?
The European Commission’s ruling on Meta’s case is expected in the coming months. If the $1 billion fine is upheld, it will mark one of the most aggressive enforcement actions under the DMA and could set a precedent for future penalties against other tech giants.
With the DMA’s enforcement ramping up, the outcome of Meta’s case will be a critical test of how strictly the EU intends to regulate digital gatekeepers. If Meta loses its appeal, it may be forced to overhaul its ad-based revenue model in Europe—a change that could have far-reaching implications for the tech industry.
