Meta has issued a statement against the European Commission’s ruling regarding the legality of its pay-or-consent model under the Digital Markets Act (DMA).

The company said in a post that the EU’s decision was “incorrect and unlawful”, intending to appeal it.

“Meta is the only company in Europe unable to offer both a subscription-based and a free ad-supported service,” Meta said. “Instead, Meta is required to offer a free, reduced-ad service – less personalised ads – that leads to poorer outcomes for users, advertisers and platforms.”

In reality, Meta’s model for Facebook would require users to pay a subscription to stop Meta from using their personal data to sell to advertisers for personalised ads. Under the DMA, Meta could still run advertisements, or offer an ad-free service, but that is not what the pay-or-consent model does. Users are not just consenting to ads, they are opted to give up their personal data to data brokers and advertisers for targeted ads, or pay a price to avoid any ads at all.

The EU Commission did not approve of this system under the DMA, and issued Meta a €200 million fine in April.

Meta said “The decision mandates the Meta must offer a less personalised ads service for free, disregarding cost, impact, or effectiveness, and imposes a potentially unviable business model.”

“This overlooks the commercial reality that, in a market economy, Meta deserves fair compensation for the valuable and innovative services that users choose to use – a principle essential to sustaining innovation and economic growth,” Meta argued.

Users typically use Meta’s platforms, including Facebook and Instagram, to connect with other users or view content, not typically to view targeted ads from third parties.

Meta also sites a 2023 ruling by the Grand Chamber of the European Court of Justice which did say that users can be charged “a fee if appropriate” to opt out of their personal data being used for some of Meta’s operations, but the ruling also said that these uses must be legitimate.

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However, Meta does admit that this ruling came before Article 5 of the DMA was introduced, which has explicit restrictions for ‘gatekeepers’ when it comes to data processing for advertisers, of which Meta is categorised.

Meta may be fined up to 5% of its revenue daily if the European Commission continues to find it in breach of the DMA ruling, the EU Commission warned.

The tech giant did issue marginal changes to its pay-or-consent model after the EU’s initial ruling, but the EU was still investigating if these changes would clear Meta when the tech giant announced its intention to appeal the decision.