The news: Meta is refusing to change its “pay or consent“ model in the EU, per Reuters, risking fines to protect its ad-targeting capabilities.

• Last month, the European Commission (EC) warned it may apply daily fines after Meta said it would only make “limited changes” to comply with the EU’s Digital Markets Act (DMA).
• The company argues it’s being singled out and that “a user choice between a subscription for no ads service or a free ad-supported service remains a legitimate business model for every company in Europe—except Meta,” per Reuters.

Zooming out: Meta’s pay or consent model gives users two choices: opt in to personalized data collection or pay a monthly fee for an ad-free experience. The EC argues that this policy is too extreme and violates the DMA because users don’t have a free alternative to limit use of personal data.

Why it matters: Privacy and user autonomy issues aside, Meta’s data collection practices give advertisers a trove of information to improve ad targeting and personalization.

Minimizing the granularity of data it can offer advertisers could make Meta a less useful partner to marketers seeking precise audience segmentation and damage its ad business.