Meta Platforms Inc. has been slapped with a warning over its subscription model for ad-free services on Instagram and Facebook, risking potentially heavy fines in the European Union’s latest attack on Big Tech under tough new rules.

EU regulators announced Monday that the so-called pay-or-consent policy falls foul of the EU’s Digital Markets Act, because the new model “forces users to consent to the combination of their personal data,” while not being offered a less personalized version of either Facebook and Instagram.

The DMA lays out a series of dos or don’ts for some of the world’s largest tech platforms. The EU’s move is a preliminary step. But eventual fines for breaches can be as high as 10% of global annual revenue, or 20% for repeated violations.

Meta introduced separate, ad-free versions of Facebook and Instagram in November, to ward off growing regulatory pressure over its processing of users’ personal data. The company said in a statement that the new model complies with the DMA and that the company looks forward “ to further constructive dialog with the European Commission to bring this investigation to a close.”

– Bloomberg