Meta Platforms Inc (NASDAQ:FB) has revealed its strategy to meet the stringent European Union (EU) regulations by offering subscription-based ad-free plans for Facebook and Instagram users in Europe.
Users in the EU, European Economic Area (EEA), and Switzerland will have the option to enjoy the social media platforms without advertisements, with monthly subscription fees set at €9.99 for web users and €12.99 for iOS and Android users, Reuters reported.
The EU regulations aim to protect user privacy by limiting companies like Meta's ability to personalize ads without explicit user consent, which poses a significant challenge to Meta's primary revenue source, which relies heavily on targeted advertising. By offering an ad-free subscription plan alongside the traditional ad-supported model, Meta hopes to strike a balance that complies with EU regulations without adversely affecting its advertising business.
Meta's relationship with the EU has been marked by antitrust pressure. The company recently lost a legal battle against a German data curb order and faced a substantial €390 million fine from Ireland's Data Privacy Commissioner, accompanied by the directive that the company could no longer use the "contract" as a legal basis to deliver ads based on users' online activity.
To adapt to the evolving regulatory landscape in Europe, Meta has pledged to seek user consent within the EU before allowing businesses to target ads based on individual online activity.
Shares of Meta were 3.1% higher in early Monday trading in New York.