By Foo Yun Chee
BRUSSELS (Reuters) -Meta Platforms has offered to almost halve its monthly subscription fee for Facebook (NASDAQ:META) and Instagram to 5.99 euros from 9.99 euros, a senior Meta executive said on Tuesday, a move that aims to address concerns from privacy and antitrust regulators.
The price cut follows mounting criticism from privacy activists and consumer groups about Meta's no-ads subscription service in Europe, which critics say requires users to pay a fee to ensure their privacy.
Meta launched the service in November to comply with the Digital Markets Act (DMA), which curbs its ability to personalise advertisements for users without their consent, hurting its major revenue source.
The company said the fee model seeks to balance the conflicting demands of EU privacy laws and the DMA.
"We have wanted to accelerate that process for some time because we need to get to a steady state ... so we have offered to drop the price from 9.99 to 5.99 for a single account and 4 euros for any additional accounts," Meta lawyer Tim Lamb told a European Commission hearing.
"That is by far the lowest end of the range that any reasonable person should be paying for services of this quality. And I think that is a serious offer. The regulatory uncertainty at the moment is out there and it needs to settle down quickly."
Austrian privacy activist Max Schrems said the issue is not about the fee.
"We know from all research that even a fee of just 1.99 euros or less leads to a shift in consent from 3-10% that genuinely want advertisments to 99.9% that still click yes. The GDPR requires that consent must be 'freely' given," he said, referring to the EU privacy legislation.
"In reality it is not about the amount of money - it is about the 'pay or okay' approach as a whole. The entire purpose of 'pay or okay' is to get users to click on okay, even if this is not their free and genuine choice. We do not think the mere change of the amount makes this approach legal."
The day-long hearing aims to give Meta's users and third parties the opportunity to seek clarity on how it complies with the DMA.
Meta made the reduced offer to regulators earlier this year and is now in talks with data protection authorities, specifically the Irish watchdog.
Users who consent to be tracked receive a free service funded by advertising revenues.
Companies risk fines of as much as 10% of their annual global turnover for DMA breaches.