European Commission Threatens Free Online Services with Misunderstood Ads Ruling, Says ITIF

WASHINGTON—In response to the European Commission notifying Meta today of its preliminary finding that the social network’s advertising model violates European law, Information Technology and Innovation Foundation (ITIF) Vice President Daniel Castro issued the following statement:

The European Commission has repeatedly shown that it does not understand the fundamentals of the Internet economy. Targeted ads pay for the free online apps and services enjoyed around the world from companies big and small. Meta has offered European users a clear set of choices: use Facebook and Instagram with targeted ads; pay for an ad-free version of these apps; or don’t use their services. The European Commission wants Meta to offer another option: a version of Facebook and Instagram that is free for users but does not have targeted ads.

Forcing companies to offer online services without personalized advertising and without cost to users would create a massive freeloading problem whereby users in other parts of the world would be subsidizing the costs of providing services to Europeans. If regions outside the EU implemented similar policies, Internet services would quickly enter a death spiral of unsustainable costs versus revenue. The United States should vigorously defend the interests of American companies who EU regulations have unfairly targeted, and the Biden administration should formally object to this preliminary finding by the European Commission.

Contact: Nicole Hinojosa, [email protected]