Meta Platforms is considering charging $14 per month for ad-free subscriptions to Instagram or Facebook for European users, according to a proposal the company submitted to regulators. The idea is to offer an alternative to the free versions of social media platforms for those concerned about data usage and privacy while still earning revenue from advertising. It’s also a way to comply with new regulations in the European Union that require tech companies to allow users to opt out of certain types of behavioral ads.
According to the WSJ, Meta has told regulators that it hopes to roll out its subscription no ads (SNA) plan in the coming months for European users. It will give users the choice between continuing to access Instagram and Facebook for free with personalized ads or paying for versions of the apps without any ads. How many users would take advantage of the option is still being determined. Still, the WSJ says it could bring in additional revenue for the company as the EU continues to crack down on online privacy.
The SNA offering builds on Apple’s iOS 14 app tracking update, allowing users to opt out of being tracked by any phone application. The move could help Meta avoid fines from the European Union’s new privacy rules, which take effect next year and will significantly restrict how it collects user data for ad targeting. It’s a significant shift for the company, relying on data-driven ads to drive its business model for years.
This isn’t the first time a social media site has offered a paid alternative to its free service. Snapchat and Twitter have ad-free options for users willing to pay; some users have been happy with the experience.
However, the new plans are less generous than some users have wanted them to be. Some have suggested that ad-free options should be around $5 or less, while others have complained about the lack of options to keep their accounts completely free. Meanwhile, some shareholders have called on the Board to split the roles of CEO and chairman, arguing that the current arrangement undermines critical checks and balances in the company’s governance structure. The letter also calls for the Board to do away with a dual-class share structure that gives Mark Zuckerberg greater voting power than other shareholders. That also risks attracting additional regulatory scrutiny and public pressure on the company. It needs to be clarified whether the Board will act on these proposals. It has yet to respond to the WSJ’s request for comment. Shareholders have until October 9 to vote on the proposals. The results will be announced on October 11.
