Instagram, Facebook to charge users for ad-free service

Meta Platforms is looking to introduce ad-free subscription plans for Instagram and Facebook users in Europe, two people familiar with the matter said on Tuesday.

Several pricing plans were discussed, but the 10 euro ($10.49) per month plan is the most feasible, one of them said, while the other source said it will be implemented in the coming months.

The proposal is an attempt by Meta to comply with European Union regulations that threaten to curb its ability to personalize ads for users without their consent and hurt its major revenue source.

Offering a choice between a free, ad-supported plan and a paid subscription might lead to users opting for the former, helping Meta comply with regulations without affecting its ad business.

Meanwhile, Netflix’s streaming subscription, which charges 7.99 euros for a basic plan, while Alphabet’s (GOOGL.O) YouTube Premium costs about 12 euros and Spotify’s (SPOT.N) Premium service is priced at about 11 euros.

On mobile devices, the price for a single account would jump to roughly 13 euros because Meta would factor in commissions charged by Apple’s and Google’s app stores, the second source said.

The social media company was fined 390 million euros earlier this year by Ireland’s Data Privacy Commissioner and told it cannot use the so-called “contract” legal basis to send users ads based on their online activity.

Meta subsequently said it intended to ask users in the EU for their consent before allowing businesses to target ads in order to address evolving regulatory requirements in the region.

A Meta spokesperson said the company believes in “free services which are supported by personalized ads”, but is exploring “options to ensure we comply with evolving regulatory requirements”.

Meta, Ireland’s Data Protection Commission declined to comment while the European Commission did not respond to a Reuters request for comment.

($1 = 0.9536 euros)