Facebook and Instagram: Paid subscriptions illegal - financial expert clarifies

Facebook and Instagram: Paid subscriptions illegal - financial expert clarifies

According to a report by www.heise.de, the Düsseldorf Higher Regional Court decided, at the request of the North Rhine-Westphalia Consumer Center, that the ordering process for the paid subscription to Facebook or Instagram violates German law. The buttons for ordering the subscription do not contain a clear reference to the obligation to pay and therefore contradict the German Civil Code (BGB) and the European General Data Protection Regulation (GDPR).

According to the German Civil Code (BGB), order buttons must clearly indicate an obligation to pay. The Düsseldorf Higher Regional Court has confirmed that the context is irrelevant and that only the text on the button is relevant. The consumer advice center is of the opinion that not only the labeling of the buttons must be legally adjusted, but also that subscriptions that have already been taken out could be invalid, meaning that fees paid may have to be repaid.

In addition, the consumer advice center has initiated a warning procedure because it is of the opinion that Meta does not obtain sufficient consent to use data for advertising purposes if you do not pay for the services. Furthermore, the consumer advice center suspects that the subscription model violates the General Data Protection Regulation (GDPR), as extensive user profiles continue to be created and the option to choose between a free account and a paid subscription does not meet the voluntary requirement.

The court decision and the consumer advice center's lawsuit could have a significant impact on the market. If the subscriptions are actually declared invalid and fees already paid have to be refunded, this could have massive financial consequences for Meta. In addition, compliance with the General Data Protection Regulation (GDPR) could be subject to increased scrutiny in connection with subscription models of other online services.

The Meta spokeswoman stated that the company is confident that the subscription model complies with European law, but the current decision by the Düsseldorf Higher Regional Court could lead to similar subscription models needing to be reviewed and adjusted across the European Union.