Tech
EU Regulators Accuse Meta of Antitrust Violations Over New Ad-Supported Service
Meta, the parent company of Facebook, faced allegations from EU regulators on Monday for failing to comply with the bloc’s landmark antitrust rules concerning its recently introduced ad-supported social networking service. The European Commission criticized Meta’s subscription model, labelling it a “pay or consent” scheme. This model forces users to either pay to use Meta’s platforms without ads or consent to their data being processed for personalized advertising. This ad-supported subscription service was introduced for Facebook and Instagram in Europe last year.
EU Commission’s Preliminary Findings
The Commission’s preliminary view suggests that this binary choice compels users to agree to the combination of their personal data, thereby failing to provide a less personalized but equivalent version of Meta’s social networks. In a statement on Monday, the regulators emphasized that users should have access to a service that utilizes less of their personal data for ad personalization.
Meta’s Response
A Meta spokesperson responded to the allegations by stating that the company’s ad-supported subscription model adheres to the directives of the highest court in Europe and complies with the Digital Markets Act (DMA). “We look forward to further constructive dialogue with the European Commission to bring this investigation to a close,” the spokesperson added. Meta introduced this new model following a ruling from the European Court of Justice last year, which allowed companies to offer an alternative version of their service that does not rely on data collection for ads.
Commission’s Critique
Despite Meta’s justification, the Commission found two key issues with Meta’s ad-supported offering. First, it doesn’t allow users to choose a service that uses less personal data but is still equivalent to the personalized ads-based service. Regulators asserted that users should be able to access an equivalent service with reduced data usage for ad personalization.
Digital Markets Act (DMA) Enforcement
The DMA, enforceable since March this year, aims to curb anti-competitive practices by large digital companies and mandate them to open up some of their services to rivals. Companies found in breach of the DMA could face substantial fines, potentially up to 10% of their global annual revenue, and for repeated breaches, this figure could rise to 20%. For Meta, a breach of the DMA could result in a penalty as high as $13.4 billion, based on the company’s 2023 annual earnings.
Next Steps for Meta
Following the receipt of the EU’s preliminary findings, Meta has the opportunity to defend itself in writing. The Commission’s investigation, launched in March alongside two other probes into tech giants Apple and Alphabet, will conclude within 12 months from the start of the proceedings.
Meta’s compliance with the EU’s antitrust rules remains under scrutiny, as the company navigates these regulatory challenges while attempting to align its business practices with the DMA’s requirements.
SoftBank has made a $1.5 billion investment in OpenAI, enabling the AI powerhouse’s employees to sell shares in a new tender offer, according to sources familiar with the matter. The tender offer, which has not been previously reported, gives employees until December 24 to decide on participation.
The deal was initiated by SoftBank’s billionaire CEO Masayoshi Son, who reportedly pushed for a larger stake in OpenAI after investing $500 million in its last funding round. This move highlights Son’s growing focus on artificial intelligence and his intent to back leading private companies in the sector.
SoftBank’s Vision Fund 2 has been actively investing in AI startups, including Glean, Perplexity, and Poolside. Across its two Vision Funds, the company manages approximately 470 portfolio companies with assets totaling $160 billion.
Even without SoftBank’s substantial financial backing, OpenAI has demonstrated remarkable fundraising capabilities. Its valuation has surged to $157 billion in the two years since the release of ChatGPT. The company has raised around $13 billion from Microsoft, closed a $6.6 billion funding round in October (led by Thrive Capital, with participation from Nvidia and others), and secured a $4 billion revolving credit line, bringing its total liquidity to over $10 billion.
Despite these significant inflows, OpenAI anticipates operating losses of $5 billion on projected revenue of $3.7 billion for 2024, reflecting the immense costs associated with advancing AI technologies.
Masayoshi Son, who has previously invested in major tech companies like Apple, Qualcomm, and Alibaba, recently expressed his intent to reserve “tens of billions of dollars” for AI investments.
The U.K.’s Financial Conduct Authority (FCA) has unveiled an ambitious plan to implement a comprehensive regulatory framework for the cryptocurrency industry by 2026. Announced on Tuesday, the roadmap outlines critical milestones that will shape the regulation of digital assets in Britain.
Starting this quarter, the FCA plans to issue discussion papers focusing on stablecoin issuance and custody, market abuse prevention, and rules for admission and disclosure. These consultations will pave the way for a detailed review of critical crypto-related activities.
In the first half of 2025, the regulator aims to expand its scope to include policies addressing trading platforms, intermediaries, crypto lending, prudential exposure, and staking rewards offered by firms for token holdings. These developments will culminate in the release of final policy statements and the activation of the full crypto regulatory regime by 2026.
The move comes as crypto adoption in the U.K. continues to grow. According to FCA research, the average value of cryptocurrency holdings among U.K. residents increased from £1,595 in 2022 to £1,842 as of August 2023.
However, the research highlights lingering misconceptions about regulatory oversight. A third of respondents mistakenly believe they could seek financial protection or file complaints with the FCA if they encounter issues in the crypto market.
The FCA’s initiative reflects a proactive stance toward fostering innovation while addressing risks in the rapidly evolving digital asset space.
Thousands of PayPal users were unable to access their accounts or process payments on Thursday due to a brief global outage, the company confirmed.
PayPal acknowledged the issue on its service status page, describing it as “a system issue” that impacted multiple products, including account withdrawals and express checkout. Cryptocurrency services and its peer-to-peer payment app, Venmo, were also affected.
The outage, which began at 10:53 UTC, was resolved swiftly, according to PayPal. Despite the brief duration, the disruption caused significant inconvenience, with users reporting difficulties logging into their accounts and completing transactions.
Downdetector, a platform outage tracker, registered over 7,000 complaints from users by 12:12 GMT. Many customers shared their frustration on social media, posting screenshots of error messages such as “please check your entries and try again” when attempting to log in.
PayPal apologized for the disruption, assuring users that its systems were back to normal.
Founded in 1998, PayPal has grown into a leading global financial institution. The company reported a record 432 million active accounts as of the end of September, cementing its role in the digital payments ecosystem.
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