Meta's Data Privacy Dilemma: Unethical Ad-free Subscription Practices and Celebrity AI Chatbots

Meta, the champion of user privacy and data protection, or so they'd like you to believe, is once again facing a growing battle with EU data protection regulators over its practices in the region. The parent company of widely used platforms including Facebook, Instagram, Threads, and WhatsApp introduced an ad-free subscription service across the EU in November 2024, offering users the option to pay a monthly fee, €5.99 on the web and €7.99 on mobile, to avoid personalized advertising.

This model, however, quickly attracted legal scrutiny. In April 2025, the European Commission formally ruled that Meta’s approach violates both the EU’s General Data Protection Regulation (GDPR) and the Digital Markets Act (DMA). The Commission found that the system does not provide a legally valid alternative to consent for data processing, as users must either pay for privacy or accept invasive tracking and profiling.

The GDPR mandates that consent for data processing must be informed, specific, and freely given. Yet Meta’s binary approach has raised significant questions about whether this consent is truly “freely given,” especially when the alternative is tied to a financial burden. Key concerns related to this situation include:

1. Lack of Freely Given Consent and Manipulation

Meta’s implementation of the subscription model has been widely criticized for undermining the very concept of voluntary consent. The European Data Protection Board (EDPB) emphasized in 2025 that consent obtained under economic pressure or service restriction is not freely given. Meta's offer to avoid personalized ads by paying a monthly fee has been deemed coercive, especially since users are not provided with a no-cost option that avoids tracking altogether.

The European Commission’s April 2025 decision confirmed this interpretation, stating that Meta’s model forces users into a corner: either pay to preserve your privacy or consent to surveillance-based advertising. This practice, regulators argue, manipulates user choice and fails to comply with Article 7 of the GDPR.

2. Inequality and Access to Data Protection

By placing privacy behind a paywall, Meta has introduced a model that could entrench digital inequality. Users who are unwilling or unable to pay the subscription fee are left with no option but to allow extensive tracking and profiling. This creates a two-tiered system of data protection, which directly contradicts the GDPR’s foundational principle that privacy is a fundamental right, not a premium feature.

In its 2025 statement, the European Commission warned that Meta’s pricing model could lead to unequal access to data protection, especially among vulnerable populations. The Commission concluded that financial barriers to privacy deepen the digital divide and undermine democratic access to rights enshrined in EU law.

3. Power Imbalance

According to the Court of Justice of the European Union (CJEU) and findings in the Commission’s 2025 investigation, Meta holds a dominant position in the digital ecosystem. This dominance allows the company to impose terms on users that they may not be able to refuse in practice, even if theoretical alternatives exist.

Users often have long-standing ties to Meta’s services, including social networks, personal data histories, and professional contacts, which make opting out exceedingly difficult. As a result, consent becomes a formal checkbox rather than a meaningful, autonomous choice, especially when combined with financial disincentives. Regulators concluded that this imbalance of power undermines the validity of consent under GDPR.

4. Data Protection for Profit

Critics argue that Meta’s introduction of a paid privacy model is less about offering real user choice and more about preserving its ability to monetize personal data. The model allows Meta to continue collecting and profiting from non-paying users, while also generating new revenue streams from those who do pay.

Even for paying users, Meta continues to collect data for purposes like analytics and service improvements, further blurring the line between meaningful consent and commercial strategy. The Commission found in 2025 that Meta’s structure appears designed to maximize revenue while appearing compliant, offering the illusion of privacy without delivering full control over data.

Legal Pushback and Outlook

In response to the EU’s decision, Meta filed an appeal in July 2025, arguing its system is transparent, lawful, and gives users meaningful choice. The company cited a 2023 CJEU ruling that, in Meta’s view, legitimizes offering a paid alternative for obtaining consent.

Nonetheless, the Commission has demanded immediate compliance, including the introduction of a free, non-personalized version of Meta’s platforms. Failure to do so could result in daily penalties of up to 5% of Meta’s global turnover, a figure that could reach billions of euros.

The General Data Protection Regulation (GDPR) asserts that every individual is entitled to equal protection of their personal data, regardless of their economic or social status. Turning privacy into a paid privilege undermines this foundational principle. By forcing users to choose between paying for data protection or surrendering to invasive tracking, Meta has introduced a model that risks making basic privacy rights conditional on financial means.

In its April 2025 decision, the European Commission found that Meta’s ad-free subscription model violates the GDPR, because consent under financial pressure is neither freely given nor balanced. Regulators stressed that a genuine, cost-free alternative to tracking must be made available to users in order for consent to be legally valid.

This monetization of privacy creates a two-tiered system, where only those who can afford to pay are fully protected, contradicting the GDPR’s core objective of ensuring equitable and non-discriminatory access to privacy.

In parallel, the Digital Markets Act (DMA), which entered into force in 2023, was established specifically to address imbalances of power between digital gatekeepers and consumers. The DMA aims to reinforce competition and curb exploitative business models that rely on data monopolies.

However, Meta’s continued defense of its subscription-based privacy model, even after the Commission’s 2025 ruling, raises questions about the efficacy of the EU's regulatory architecture. If a dominant platform can exploit legal ambiguities in existing legislation to preserve data-driven profit at the expense of user rights, it could signal a critical weakness in how EU institutions are able to enforce their own rules.

This concern has been echoed by civil rights organizations like NOYB, European Center for Digital Rights, which argue that Meta’s approach commodifies fundamental rights, and that the absence of timely enforcement mechanisms could allow similar models to spread across the tech industry unchecked.

Related blog: Super Apps: Is the Future of Social Media a Danger to Data Privacy?

Lack of End-to-End Encryption

One of the key concerns about Meta’s AI chatbots is the absence of end-to-end encryption on platforms like Instagram and Messenger. While WhatsApp does support end-to-end encryption by default, chats with AI personas on Instagram are not protected in the same way. Without this safeguard, messages can be accessed by Meta or intercepted by unauthorized parties, undermining user confidentiality. This contradicts Meta’s public commitments to private messaging and exposes a gap between policy and practice.

Data Collection and Use

Meta’s AI assistants collect extensive behavioral and conversational data, including messages users send during interactions. Although Meta claims that personal identifiers are not stored, its AI privacy disclosure confirms that these conversations are used to improve model performance. This raises questions about the blurred line between personalization and surveillance, especially when sensitive data or emotional content is shared.

Lack of Transparency

Meta’s generative AI privacy policy lacks specificity regarding what data is retained, how long it’s stored, and whether it is shared with third parties. The use of broad language like "used to enhance experiences" leaves users without a clear understanding of how their data is processed. In June 2025, the EDPB emphasized that AI systems must meet strict transparency and purpose limitation standards under GDPR, requirements that Meta’s chatbot rollout may be failing to meet.

Given Meta’s track record of privacy violations, these gaps in encryption, data governance, and disclosure reinforce skepticism. Users should remain cautious when engaging with AI personas across Meta’s platforms, particularly where protections are unclear or inconsistent.

Related blog: OpenAI's GDPR investigations and the growing importance of Data Privacy in the AI era.

With these data privacy concerns in mind, organizations can take proactive steps, such as policies, guidance, or training on the appropriate use of consumer AI tools, to mitigate risks when using AI systems and chatbots in the workplace. Different organizations may have varying approaches to this, from completely banning AI tool usage to some organizations choosing to educate employees on the risks and identifying suitable applications. Some of the best practices include: 

Related topic: heyData employee compliance training 

The ongoing battle between Meta and EU data protection regulators underscores the growing complexities and challenges of ensuring data privacy in the digital era. Despite Meta’s repeated attempts to present itself as a champion of user privacy and data protection, recent controversies, ranging from unlawful tracking practices and coercive subscription models to concerns about AI chatbot data handling, continue to undermine these claims.

This persistent regulatory scrutiny highlights the urgent need for clearer rules and stronger enforcement to protect user rights effectively. It also serves as a reminder for consumers and organizations alike to remain vigilant about data privacy and demand greater transparency and accountability from tech giants.
 

Q: What is the main privacy concern with Meta’s ad-free subscription?
A: Meta’s subscription forces users to either pay for privacy or accept tracking, which may not be considered freely given consent under GDPR.

Q: Are messages sent to Meta’s AI chatbots fully private?
A: No, messages are not end-to-end encrypted, meaning they could be accessed by unauthorized parties.

Q: How can companies protect employee data when using AI chatbots?
A: Organizations should create clear policies and provide training on the safe and appropriate use of AI tools in the workplace.