Meta Platforms Inc (NASDAQ:META, ETR:FB2A, SWX:FB) has moved to cut subscription fees on its Instagram and Facebook sites almost in half as scrutiny mounts over privacy concerns.
Monthly fees for the sites’ no-ad subscriptions will be cut from €9.99 (US$10.84) to €5.99, a lawyer on behalf of Meta said on Tuesday.
This comes after critics have argued that the services effectively require users to pay in order to ensure their privacy.
Users who do consent to personalised ads are granted a free service on both Facebook and Instagram, funded by advertising revenues.
Meta had launched the subscriptions in November to comply with Europe’s Digital Markets Act rules preventing users from being shown personalised ads without consenting.
According to Meta, the subscriptions were designed to address conflicting demands between EU privacy rules and requirements under the Digital Marketing Act.
“We have wanted to accelerate that process for some time because we need to get to a steady state,” Meta lawyer Tim Lamb said to the European Commission.
“So we have offered to drop the price,” he continued.
“That is by far the lowest end of the range that any reasonable person should be paying for services of [this] quality, and I think that is a serious offer.”
His comments came as part of a day-long hearing designed to offer Meta’s users and third parties clarity on how such subscriptions comply with EU laws.
Failure to comply with such Digital Marketing Act rules sees companies risk fines worth up to 10% of their annual turnovers.
“The regulatory uncertainty at the moment is out there and it needs to settle down quickly,” Lamb added.