Meta is challenging the EU’s ruling that its ad-supported model does not comply with the Digital Markets Act (DMA). The tech giant claims the decision is both “incorrect and unlawful” and disregards a previous ruling from the EU’s highest court.
In April, the European Commission concluded that Meta’s offering to European users – which allows them to choose between paying for an ad-free subscription or using a free service supported by ads – violates the DMA’s requirements.
Meta’s VP of Legal, Tim Lamb, argues the decision misinterprets the law and ignores established legal precedent.
Meta says earlier court ruling contradicts EU Commission’s DMA stance
A central complaint in Meta’s appeal is that the Commission has disregarded a July 2023 judgment from the Grand Chamber of the European Court of Justice (CJEU). This judgment explicitly stated that companies could validly obtain consent by offering users a choice between a subscription service and a free, personalised ad-supported alternative.
“The Commission is choosing to overlook a judgment by the highest court in the EU which is directly addressed at Meta, relates to the same data processing issues and specifically assessed our ads business model,” Lamb explains.
Meta points out that multiple national courts and data protection authorities across Europe – including those in France, Denmark, and Germany – have consistently supported business models offering paid subscription alternatives to consent for personal data use in personalised advertising.
The company argues that the EU Commission’s DMA decision effectively singles out Meta as the only business in Europe unable to offer both subscription-based and free ad-supported services. Instead, Meta is being required to provide a free service with less personalised advertisements, which it claims leads to poorer outcomes across the board.
Commercial realities at odds with EU Commission demands
The social media giant contends that the Commission’s decision fails to recognise commercial realities by mandating that Meta must offer a less personalised advertising service at no cost, regardless of the economic impact or business viability.
“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,” Lamb argues, describing this principle as “essential to sustaining innovation and economic growth.”
According to Lamb, the Commission’s justification that social media is “integral” to the daily lives of European Economic Area citizens implies these services should be free. However, he notes that other services considered essential – such as telecoms, news media, and broadband providers – are not expected to operate without compensation.
Economic impact of forced advertising changes
Meta has presented evidence suggesting its personalised advertising services were linked to €213 billion in economic activity and 1.44 million jobs across the EU in 2024. Despite this significant economic contribution, the Commission demanded that Meta offer less personalised ads for free.
In response to these demands, Meta launched Less Personalised Ads (LPA) in November 2024. The company states that LPA uses almost 90% less data than personalised ads, resulting in advertisements that are far less relevant to users.
Early feedback has reportedly shown negative outcomes. According to Meta, LPA has led to an “almost 800% rise in ads being closed for reasons such as being ‘irrelevant’ or ‘repetitive,’ highlighting a significantly poorer user experience.”
The impact on advertisers has reportedly been substantial as well. Meta claims that LPA leads to “70% fewer onsite conversions and 61% fewer offsite conversions compared to personalised ads.” Small and medium-sized enterprises, which make up the majority of Meta’s advertiser base, are said to be the most affected.
“Despite numerous advertisers flagging these concerns to the Commission, they seem to have been ignored,” Lamb states.
Meta criticises EU regulatory dialogue around DMA compliance
Meta also criticises what it perceives as inconsistent regulatory engagement. While the company’s constructive approach was initially acknowledged by the Commission, Lamb claims that “as 2024 progressed, the goalposts kept shifting and that has continued into 2025.”
The tech giant states that despite making proposals and investing significantly in compliance efforts, feedback from the Commission was often inconsistent or absent entirely. According to Lamb, the Commission repeatedly stated it would “never be in a position to bless DMA compliance proposals.”
Meta’s appeal raises questions about the regulatory process itself, with Lamb calling for “key stakeholders – including the industry and the Commission – to demonstrate what meaningful regulatory dialogue looks like and how we can all contribute to a return to a better system of regulation.”
The outcome of this appeal from Meta against the EU Commission will have major implications for how the DMA is applied to major technology platforms operating in Europe, particularly regarding the balance between data protection requirements and sustainable business models.
(Photo by mariia shalabaeva)
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