Meta (META) announced today (Oct. 30) that it will charge Facebook and Instagram users in Europe a subscription fee for an ad-free experience starting in November. The subscriptions will cost €9.99 ($ 10.60) per month for web and €12.99 ($13.79) for mobile apps. Initially, one subscription will cover all accounts linked to its owner. But starting March 2024, users will have to pay an extra fee for each additional account, which will be €6 ($6.37) per month for web and €8 ($8.49) for mobile. The rollout came just days after Meta CFO Susan Li shared an update on the company’s European ad strategy.
Meta said it introduced the subscriptions to comply with European Union regulations. In May, The E.U. fined Meta $1.3 billion for violating its data privacy rules by transferring user data in Europe to servers in the U.S. Following a legal battle, the E.U. effectively barred the social platform from harvesting user data across its platforms for targeted ads without user consent.
To resume collecting user data, Meta said in August it would make changes to comply with Europe’s General Data Protection Regulation around consent issues. “We’ll continue to advocate for an ad-supported internet, even with our new subscription offering in the E.U., EEA [European Economic Area] and Switzerland. But we respect the spirit and purpose of these evolving European regulations, and are committed to complying with them,” Meta said.
During Meta’s third-quarter earnings call last week, Bank of America analyst Justin Post asked Meta executives about the company’s potential subscription offering and GDPR compliance issue in Europe. CFO Susan Li didn’t reveal much, but said the company was working on “a consent model” for ads in Europe.
Even though Meta’s new subscription plan for Europe resulted from a legal battle, entirely subscriptions-based social platforms that used to be free may be something to keep an eye on.
X, formerly known as Twitter, is testing a $1 yearly fee for new users in the Philippines and New Zealand to access basic functions such as reposting, liking and replying to posts. X owner Elon Musk said this is the best way to get spam accounts and bots off the platform. In the past, Musk has floated the idea of making X a completely paywalled platform.
Meta reported an increase in ad revenue for the quarter ended September. Ad revenue rose 23 percent in the quarter from a year ago and showed strides since 2021. Li explained on the earnings call that the company is still cautious about what ad sales will look like going into the fourth quarter because of the ongoing Israel-Hamas war.