The European Commission has notified Meta of its preliminary finding that the social network’s advertising model violates European law. In response, Daniel Castro, Vice President of the Information Technology and Innovation Foundation (ITIF), issued a statement criticizing the decision.
"The European Commission has repeatedly shown that it does not understand the fundamentals of the Internet economy," Castro stated. He emphasized that targeted ads are crucial for funding free online apps and services globally, from companies both large and small. According to Castro, Meta provides European users with three options: use Facebook and Instagram with targeted ads, pay for an ad-free version of these apps, or opt not to use their services at all.
Castro highlighted that the European Commission is demanding another option: a version of Facebook and Instagram that remains free for users but does not feature targeted ads. He argued that forcing companies to offer online services without personalized advertising and without cost to users would create a "massive freeloading problem" where users in other regions would subsidize the costs of providing services to Europeans.
"If regions outside the EU implemented similar policies, Internet services would quickly enter a death spiral of unsustainable costs versus revenue," Castro warned. He urged the United States to defend American companies' interests against what he perceives as unfair targeting by EU regulations. Additionally, he called on the Biden administration to formally object to this preliminary finding by the European Commission.
Contact: Nicole Hinojosa, [email protected]
