During a hearing in Brussels on Tuesday, social media giant Meta proposed a reduction in the price of its European premium subscription offers. This decision appears to be a response to criticism from regulators and complaints filed since the launch of the paid subscription offer.
The reasons behind this reduction proposal
Calm the anger of regulators and users.
According to a lawyer representing the company at the hearing, this measure would allow European users to benefit from Facebook and Instagram without advertising at a cost half that proposed so far. By reducing its prices, Meta seeks to ease tensions with European regulators, who denounce an anti-competitive practice.
The American firm is accused of favoring its own services by setting up a discriminatory subscription system. In addition, many users complained that prices were considered too high, putting additional pressure on Meta to review its pricing schedule.
Pursue its income diversification strategy.
This proposal is also part of Meta's desire to diversify its sources of income by relying on paid subscriptions while avoiding the wrath of the European authorities.
Currently, most of the revenue of the parent companies of Facebook and Instagram comes from advertising. Implementing a viable subscription system would allow the company to better balance its revenue stream and meet the expectations of users wanting an ad-free experience.
Is a price change sufficient to resolve the problem?
While this reduction is a step forward, it is unlikely to be enough to put an end to criticism from regulators and opponents of the current subscription system. The European Commission has already opened several investigations targeting Meta, notably regarding its dominant position in the social media sector and its alleged use of users' personal data for lucrative commercial purposes.
Even if the price cut proposal is accepted, it will not eliminate all the problems Meta faces in Europe.
Dealing with other regulatory issues
Other questions also arise regarding the American giant's compliance with local privacy and data protection laws, in particular with the General Data Protection Regulation (GDPR).
Some European associations accuse Meta of violating consent rules regarding advertising based on users' interests. These issues could result in legal action against the company and significant financial sanctions if Meta fails to convince European authorities of the legality of its practices.
The challenge of competition in the digital market
Finally, the question of competitive equity remains central. The price reduction proposed by Meta could allow more users to benefit from the premium subscription, but regulators are also concerned about the ability of other players in the sector to compete with the American giant.
It is likely that discussions around European legislation on digital services, such as the Digital Markets Act (DMA), will continue to fuel debates regarding Meta's business practices.