Meta Mulls Over Monthly Subscription Charges for Facebook and Instagram in the EU

Meta Platforms (NASDAQ: META), the parent company of Facebook and Instagram, is contemplating introducing monthly subscription charges in the European Union (EU) as it faces mounting regulatory scrutiny over its data usage practices. 

Sources familiar with the matter reveal that Meta is considering a €13 monthly fee for ad-free access to Instagram or Facebook on mobile devices. The company is also reportedly mulling over a €17 charge for the desktop version of Facebook and Instagram together, while users opting for ad-free access for both platforms on mobile may incur a monthly fee of approximately €19.

This development comes in response to a significant ruling by the European Court of Justice in July, which stated that Meta’s use of personal data for personalized ads, its primary revenue source, cannot occur without prior user consent under the General Data Protection Regulation (GDPR). 

The court’s ruling suggested the possibility of charging an “appropriate fee” for an ad-free experience, prompting Meta’s exploration of this subscription-based model.

Meta is currently engaged in discussions regarding its plans with Ireland’s Data Protection Commission, responsible for regulating the company across the EU due to its regional base in Dublin, and European officials in Brussels. The ad-free service, known as SNA (Subscription No Ads), would offer users the choice to continue using Facebook and Instagram for free with personalized ads or to pay for an ad-free experience.

The paid service could be introduced as early as next month. Meta has until the end of November to comply with the ECJ ruling. The price tiers for the service will likely still be scrutinized by regulators to ensure that they are not too expensive for consumers.

“Meta believes in the value of free services which are supported by personalized ads. However, we continue to explore options to ensure we comply with evolving regulatory requirements,” a Meta spokesperson said in a statement.

More layoffs up ahead

Reuters also reported that Meta is set to cut jobs in its Reality Labs division, specifically in the unit focused on custom silicon for its metaverse-oriented projects. According to sources familiar with the matter, the layoffs are expected to occur on Wednesday, and affected employees were notified of this impending action via an internal post on Meta’s Workplace forum.

While the exact extent of the layoffs within the silicon unit, known as the Facebook Agile Silicon Team (FAST), remains undisclosed, they could potentially impact Meta’s ambitions in the augmented and virtual reality space, including CEO Mark Zuckerberg’s vision of the metaverse. The FAST unit, consisting of approximately 600 employees, had been working on custom chips to enhance the performance and efficiency of Meta’s devices for the emerging AR/VR market.

However, Meta has faced challenges in developing competitive chips and has turned to external chipmaker Qualcomm for its current device offerings. The restructuring of FAST had been anticipated since the spring when Meta appointed a new executive to lead the unit.

Meta has undergone a series of job cuts in recent months, totaling around 21,000 positions, as part of cost-cutting measures amid concerns over revenue growth and the financial performance of the Reality Labs division. 

These actions come as Meta continues to innovate in the AR/VR space, recently announcing new versions of its smart glasses and mixed reality headsets at its Connect conference. The company is also working on more streamlined AR glasses and smartwatches, although initial availability to consumers is expected to be limited.

Information for this story was found via Reuters, and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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