Possible Meta changes in the EU: paying for privacy?

Posted by Q McCallum on 2023-09-04
A close-up shot of two hands, counting out money in bill form.  Photo by Igal Ness on Unsplash.

(Photo by Igal Ness on Unsplash )

Here’s another change inspired by EU data laws: Meta may allow people to pay to skip advertising.

Meta May Allow Instagram and Facebook Users in Europe to Pay to Avoid Ads” (New York Times)

Let’s call this what it is: it’s not “paying to avoid ads”; it’s “people paying Meta directly instead of paying them indirectly through advertisers.”

Assuming this goes through:

1/ This may shed light on how Meta values users’ personal data. This is hardly a perfect lens, but it’s a start. I expect the price will reflect what Meta feels it would be able to get through advertisers.

2/ This could lead to a two-tiered system in which only those with the means to pay will get privacy. Not only would that raise interesting questions for society as a whole, it may also pose an issue for advertisers. How will they feel knowing that they’re locked out of an audience of privacy-conscious, well-to-do Europeans?

3/ But … will Meta stop collecting data on those who pay? Or will they continue to feed their data into AI models, but just not show them advertisements?

And then, there’s the big one:

4/ This change may also come as a relief to some people inside the company.

There were already concerns about the effectiveness of Meta’s ad targeting (remember the internal memo that said the behavioral targeting was “almost all crap?”) … and then Apple’s iOS privacy changes apparently nixed about ten billion dollars in ad revenue. That’s a hell of a one-two punch for an online ads business.

Getting people to pay for Facebook and Instagram is one way to plug that hole in revenue. In fact, balancing paid subscriptions with ad-supported use is one way for Meta to hedge their bets over the long run. It’s not unlike running a “barbell strategy” in trading, with one side heavy on fixed-income and the other stacked with emerging-market stocks. (I explored the recent Disney+ price changes through this lens last month.)