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Business News/ Technology / Meta Floats Charging $14 a Month for Ad-Free Instagram or Facebook
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Meta Floats Charging $14 a Month for Ad-Free Instagram or Facebook

wsj

European users would have the option to pay a fee or agree to personalized ads, according to the company’s pitch to regulators.

Meta hopes to roll out the plan in coming months for European users. Premium
Meta hopes to roll out the plan in coming months for European users.

Would people pay nearly $14 a month to use Instagram on their phones without ads? How about nearly $17 a month for Instagram plus Facebook—but on desktop?

That is what Meta Platforms wants to charge Europeans for monthly subscriptions if they don’t agree to let the company use their digital activity to target ads, according to a proposal the social-media giant has made in recent weeks to regulators.

The proposal is a gambit by Meta to steer around European Union rules that threaten to restrict its ability to show users personalized ads without first seeking user consent—jeopardizing its main source of revenue.

Meta officials detailed the plan in meetings in September with its privacy regulators in Ireland and digital-competition regulators in Brussels. The plan has been shared with other EU privacy regulators for their input, too.

Meta has told regulators it hopes to roll out the plan—which it calls SNA, or subscription no ads—in coming months for European users. It would give users the choice between continuing to access Instagram and Facebook free with personalized ads, or paying for versions of the services without any ads, people familiar with the proposal said.

Under the plan, Meta has told regulators it would charge users roughly €10 a month, equivalent to about $10.50, on desktop on a Facebook or Instagram account, and roughly €6 for each additional linked account, the people said. On mobile devices the price would jump to roughly €13 a month because Meta would factor in commissions charged by Apple’s and Google’s app stores on in-app payments.

Planning to launch a subscription option for core Meta services is a major turnaround for the company. Meta Chief Executive Mark Zuckerberg has long insisted that his core services should remain free and supported by advertising so that they can be available to people of all income levels.

“You don’t need thousands of dollars to connect with people who use our services," Zuckerberg said at a 2018 conference in a not-so-thinly veiled dig at rival Apple, where CEO Tim Cook for his part decried what he called a “data industrial complex."

Privacy-conscious users in the U.S. shouldn’t expect to be offered the option to pay for ad-free Instagram or Facebook soon. Meta’s proposals have been pitched specifically as a way to navigate demands by EU regulators to seek consent before crunching user data to select highly personalized ads.

To be sure, Zuckerberg has also said he would be open to the idea of a paid service to cope with tougher scrutiny about privacy. And earlier this year, amid a broader tech slump and a growing trend toward subscriptions from apps such as Snapchat and X, formerly Twitter, Meta introduced a paid user-verification service.

It isn’t clear if regulators in Ireland or Brussels will deem the new plan compliant with EU laws, or whether they will insist Meta offer cheaper or even free versions with ads that aren’t personalized based on a user’s digital activity.

One issue for regulators, some of the people familiar with the proposals said, is whether the prices Meta is proposing to charge will make the ad-free service too expensive for most people, even if they don’t want to have their data used to target ads.

A Meta spokesman says the company believes in “free services which are supported by personalized ads" but is exploring “options to ensure we comply with evolving regulatory requirements."

A spokesman for Ireland’s Data Protection Commission, which leads enforcement of EU’s privacy law for Meta because it has a regional headquarters in Ireland, didn’t immediately have a comment. The European Commission, which enforces the digital-competition law, didn’t immediately have any comment.

Meta’s proposal to regulators and specifics of the plan such as the price and timing haven’t been previously reported. The New York Times reported last month that Meta was considering offering ad-free versions of its apps for a fee.

Driving Meta’s proposal has been demands by privacy regulators, led by Ireland, that Meta seek user consent before showing so-called behavioral ads, targeted with user activity data. In response, Meta had offered to seek such consent as soon as the end of October, The Wall Street Journal previously reported.

Separately, the EU’s executive arm said last month that Instagram, Facebook and Meta’s advertising network would fall under the scope of the bloc’s new digital-competition law, the Digital Markets Act. That law requires user consent before mingling user data among its services, or combining it with data from other companies.

Meta has said it hopes its subscription plan could comply with both edicts. Under the EU law, a user who declines to give consent for certain data use must still be able to access a service.

Meta reported its overall revenue in Europe worked out to roughly $17.88 per Facebook user in the second quarter, or just under $6 per user across all of its apps, on average, per month. The real average-revenue-per-month figure for EU users is likely somewhat higher, however, because Meta’s broader Europe region includes several non-EU countries including Turkey and Russia where lower revenue may drag down the average.

Meta estimates it has 258 million monthly Facebook users and 257 million Instagram users for the first half of the year in the EU, according to data it publishes under the bloc’s content-moderation law. The company said in a U.S. securities filing that it had 3.88 billion monthly active people on its apps as of June 30.

Meta has been pushed toward a subscription service by tightening enforcement of EU rules. A July decision from the bloc’s top court ruled Meta would need consent for certain kinds of targeted ads based on users’ online activity. That led privacy regulators in Ireland to tell Meta it had to change its practices.

Norway’s privacy regulator said it wanted a faster resolution and in July ordered Meta to suspend its ads targeted based on user activity in the country. Last week, the Norway regulator asked a board of all EU regulators to expand its ban across the bloc. Such an order, if approved, would likely face court appeals.

Meta has in pushing for its plan pointed to previous examples of how some other companies, such as music-streaming service Spotify, offer users a choice between a free ad-supported service or a subscription service without ads. Meta’s proposed pricing on mobile is similar to what YouTube charges for its ad-free premium service in Europe.

The company has also pointed to a paragraph in that July EU court decision that said social-media companies could charge a “reasonable fee" to users who decline to let their data be used for certain ad-targeting purposes, saying that opens the door to a subscription service.

Write to Sam Schechner at Sam.Schechner@wsj.com

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