Meta Introduces Key Changes to Facebook and Instagram in the EU

On November 12, 2024, Meta announced significant updates to Facebook and Instagram for users in the EU, including a 40% reduction in subscription costs for an ad-free experience. Going forward, EU users can choose between subscribing for an ad-free experience or continuing to access services for free. Those opting for the free version can now select to see less personalized ads, while the company remains committed to personalized advertising as a cornerstone of its free and inclusive internet model.

Reduced Subscription Costs for Ad-Free Experience

Starting November 13, 2024, the monthly subscription cost will drop from €9.99 to €5.99 on the web and from €12.99 to €7.99 on iOS and Android. Additional accounts will cost €4 per month on the web and €5 per month on iOS and Android. Existing subscribers will automatically benefit from the reduced prices. Users will also be prompted to decide whether they prefer the lower-cost subscription or free access with ads.

Introducing Less Personalized Ads in the EU

In compliance with GDPR and DMA regulations, Meta launched its ad-free subscription model last year. To further align with regulatory feedback, Meta is now introducing less personalized ads for users opting for the free version. These ads will rely on minimal data, such as age, location, and gender, and will be based on contextual content viewed during a session.

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What to Expect from Less Personalized Ads

While the less personalized ads option gives users more control over their data, it may reduce the relevance of ads. Users will see unskippable ad breaks, a feature common in other services, allowing advertisers to reach broader audiences while supporting free access to the platform.

Users will be notified about this new option via dismissible prompts, which will later become non-dismissible. Choices can be revisited anytime through ad settings, along with existing data control tools.

The Value of Personalized Ads

Meta reiterated the importance of personalized ads, which drive significant value for individuals and businesses. Personalized ads enable small businesses, which account for over 99% of EU businesses, to reach targeted audiences cost-effectively, contributing to economic growth. Studies show that personalized ads generate €107 billion in annual revenue for European businesses, with every €1 spent on Meta ads yielding €3.79 in returns.

Meta emphasized that stricter regulations could diminish the efficiency of digital advertising, potentially harming small businesses and the broader European economy.

Commitment to Regulations and Innovation

The company has introduced these changes to meet EU regulatory demands while continuing to advocate for personalized ads as a vital component of a free, ad-supported internet. Meta remains committed to working with regulators to strike a balance between user control and economic growth, ensuring high-quality services for EU citizens and businesses alike.

These changes have been factored into Meta’s latest business outlook and guidance. Forward-looking statements in this announcement are subject to risks and uncertainties outlined in the company’s most recent Form 10-Q filing.