Meta to charge $14/month for ad-free Instagram or Facebook.
Meta intends to implement a subscription fee of $14 per month for users seeking an ad-free experience on Instagram or Facebook. Is there a willingness among consumers to pay approximately $14 monthly for an ad-free experience on Instagram via mobile devices? What if the cost were approximately $17 per month for access to Instagram and Facebook, specifically on desktop platforms?
Meta Platforms has proposed to charge Europeans for monthly subscriptions should they decline to permit the company to utilize their digital activities for targeted advertising, as outlined in a recent submission to regulators. The proposal represents a strategic maneuver by Meta to address European Union regulations that pose a risk to its capacity to deliver personalized advertisements to users without obtaining prior consent, thereby endangering its primary revenue stream.
Officials from Meta outlined their strategy during discussions held in September with privacy regulators in Ireland and digital competition authorities in Brussels. The proposal has been disseminated among other EU privacy regulators to solicit their feedback as well. Meta has informed regulators of its intention to implement a plan, referred to as SNA, or subscription no ads, for European users in the forthcoming months. Users would be presented with the option to either maintain access to Instagram and Facebook at no cost, accompanied by personalized advertisements, or to opt for a paid version of the services that would be devoid of any advertising, according to sources familiar with the proposal.
According to the proposal, Meta has informed regulators that it intends to impose a fee of approximately €10 per month, which translates to around $10.50, for users accessing Facebook or Instagram via desktop. Additionally, there would be a charge of roughly €6 for each supplementary linked account, as reported by sources. For mobile devices, the cost is projected to increase to approximately €13 per month, as Meta will incorporate the commissions imposed by Apple and Google’s app stores on in-app transactions.
The decision to introduce a subscription model for essential Meta services represents a significant shift in the company’s strategic approach. Mark Zuckerberg, the Chief Executive of Meta, has consistently maintained that his fundamental services ought to be provided at no cost and funded through advertising, ensuring accessibility for individuals across various income brackets. “One does not require a substantial financial investment to engage with individuals utilizing our services,” Zuckerberg remarked during a 2018 conference, subtly critiquing competitor Apple, whose CEO Tim Cook, in response, condemned what he termed a “data industrial complex.”
Users in the U.S. who prioritize privacy should not anticipate the introduction of a paid, ad-free version of Instagram or Facebook in the near future. Meta’s proposals have been strategically presented as a means to address the requirements set forth by EU regulators, which necessitate obtaining consent prior to processing user data for the purpose of delivering highly personalized advertisements. Zuckerberg has indicated a willingness to consider the implementation of a paid service in response to increasing scrutiny regarding privacy concerns. Earlier this year, in the context of a wider downturn in the technology sector and an increasing shift towards subscription models from applications like Snapchat and X, previously known as Twitter, Meta launched a paid user-verification service.
The compliance of the new plan with EU laws remains uncertain, as it is unclear whether regulators in Ireland or Brussels will require Meta to provide cheaper or potentially free versions that include non-personalized advertising based on users’ digital activities. Regulators face a significant concern, according to sources acquainted with the proposals, regarding whether the pricing structure suggested by Meta for its ad-free service will render it prohibitively expensive for the average consumer, even for those who prefer not to have their data utilized for targeted advertising.
A spokesperson for Meta stated that the company is committed to providing “free services supported by personalized ads,” while also examining “options to ensure compliance with evolving regulatory requirements.” A representative from Ireland’s Data Protection Commission, responsible for enforcing the EU’s privacy regulations for Meta due to its regional headquarters in Ireland, was not available for immediate comment. The European Commission, responsible for the enforcement of digital competition regulations, has not provided an immediate response.
Details regarding Meta’s proposal to regulators, including aspects such as pricing and timing, have not been disclosed in prior reports. Last month, The New York Times indicated that Meta was contemplating the introduction of ad-free versions of its applications for a subscription fee. Meta’s proposal is primarily driven by the demands of privacy regulators, particularly from Ireland, who require that the company obtain user consent prior to displaying behavioral advertisements that are tailored based on user activity data. In response, Meta indicated it would pursue such consent by the end of October, as reported earlier by The Wall Street Journal.
In a recent announcement, the European Union’s executive body indicated that Instagram, Facebook, and Meta’s advertising network would be subject to the provisions of the bloc’s newly implemented Digital Markets Act, which addresses digital competition. The legislation mandates that user consent must be obtained prior to the integration of user data across its services or the amalgamation of such data with information from external entities.
Meta has expressed optimism that its subscription plan may adhere to both directives. According to EU legislation, individuals who refuse to provide consent for specific data utilization are nonetheless entitled to access a service. Meta disclosed that its total revenue in Europe amounted to approximately $17.88 per Facebook user during the second quarter, translating to an average of just under $6 per user across all its applications each month. The actual average revenue per month for EU users is probably somewhat elevated, as Meta’s broader Europe region encompasses several non-EU nations such as Turkey and Russia, where lower revenue figures may depress the overall average.
Meta reports that it has 258 million monthly users on Facebook and 257 million on Instagram for the first half of the year within the EU, as per data released in compliance with the bloc’s content-moderation regulations. The firm disclosed in a U.S. securities filing that it recorded 3.88 billion monthly active users across its applications as of June 30. Meta is being compelled to adopt a subscription model due to the increasing rigor of regulatory enforcement in the European Union. A ruling issued in July by the European Union’s highest court determined that Meta must obtain consent for specific categories of targeted advertisements that rely on users’ online behavior. This prompted privacy regulators in Ireland to instruct Meta to amend its operational practices.
Norway’s privacy regulator expressed a desire for expedited resolution and, in July, mandated that Meta halt its user activity-based targeted advertising within the nation. Recently, the regulatory authority in Norway requested that a collective of EU regulators extend its prohibition throughout the entire bloc. An approval of such an order would probably encounter legal challenges. Meta has advocated for its strategy by referencing prior instances where various companies, including the music-streaming platform Spotify, provide consumers with the option of a complimentary ad-supported service or a subscription model devoid of advertisements. Meta’s suggested pricing for mobile aligns closely with the fees imposed by YouTube for its ad-free premium offering in Europe.
The firm has highlighted a section in the July EU court ruling which indicated that social media platforms may impose a “reasonable fee” on users who opt out of allowing their data to be utilized for specific advertising targeting, suggesting this could pave the way for a subscription model.
