Meta's newly introduced 'Pay or Consent' advertising model is in hot water after an investigation by European competition regulator found that model to be in breach of the EU bloc's Digital Markets Act (DMA).

The European Commission this week released preliminary findings suggesting that the binary choice presented by Meta's model forces users to consent to the combination of their personal data and fails to provide them with a less personalised but equivalent version of Meta's social networks.

"Our investigation aims to ensure contestability in markets where gatekeepers like Meta have been accumulating personal data of millions of EU citizens over many years. Our preliminary view is that Meta's advertising model fails to comply with the Digital Markets Act. And we want to empower citizens to be able to take control over their own data and choose a less personalised ads experience," said European Commission Executive Vice-President in charge of competition policy, Margrethe Vestager.

The tech giant launched the 'Pay or Consent' model - an ad-free subscription service for Facebook and Instagram - last November, in response to regulatory changes in the EU. This offer requires EU users of Facebook and Instagram to choose between paying a monthly subscription for an ads-free version of the platforms, or free-of-charge access to a version with personalised ads.

According to the Commission, the DMA requires gatekeepers to seek users' consent for combining their personal data between designated core platform services and other services. If a user refuses such consent, they should have access to a less personalised but equivalent alternative.

"Our preliminary view is that Meta's 'Pay or Consent' business model is in breach of the DMA. The DMA is there to give back to the users the power to decide how their data is used and ensure innovative companies can compete on equal footing with tech giants on data access," said Commissioner for Internal Market, Thierry Breton.

The European Commission has directed its findings to Meta with the tech giant able to respond in writing. If the Commission confirms a decision that Meta's model does not comply with the DMA, the business could be fined up to 10% of its total global turnover, with fines jumping to 20% for repeat offences.

"Subscription for no ads follows the direction of the highest court in Europe and complies with the DMA. We look forward to further constructive dialogue with the European Commission to bring this investigation to a close," a Meta spokesperson told Reuters.