Meta faces backlash as European compliance leads to worse user experience

In April 2025, Meta, formerly known as Facebook, issued a warning regarding the impending impact on its European user experience as a result of a regulatory decision made by the European Commission. The Commission recently declared that Meta's proposed 'consent or pay' model violated the Digital Markets Act (DMA), resulting in a fine of €200 million. This model allowed users to select between a subscription fee or consent to data collection from Facebook and Instagram. The ruling pointed out that the model failed to ensure true voluntary consent from users regarding their data usage. Meta indicated that it would need to modify its business model following the feedback from the European Commission and acknowledged that these modifications could result in a significantly poorer experience for its European users. The company's quarterly earnings statement highlighted expectations of diminished user satisfaction and severe repercussions on its revenue and business operations in Europe. Meta's CEO, Mark Zuckerberg, conveyed this concern, suggesting that the changes could become evident as early as the third quarter of the same year, even as the company seeks to appeal the Commission's decision. Industry analysts have suggested that Meta's warning is an attempt to sway public perception against the regulatory framework of the DMA. This comes during a period where Meta successfully showcased its quarterly earnings that exceeded Wall Street’s expectations, emphasizing strong advertising revenue and a significant rise in daily active users. Investors noted the company's aggressive investment in artificial intelligence, as highlighted by the introduction of AI-related tools and updates. Consequently, the European Commission’s decision, along with fines to other tech giants like Apple, brings to the forefront the challenges that Meta faces in navigating an increasingly active regulatory landscape both in Europe and the United States. Alongside its appeal of the DMA decision, the company is currently embroiled in legal battles over antitrust allegations by the US Federal Trade Commission, which claims that Meta has created a social media monopoly by acquiring platforms like Instagram and WhatsApp. As Meta grapples with compliance issues amid its growth ambitions, the unfolding situation presents a complex interplay between regulatory adherence and the company’s operational strategies in one of its key markets.