Consent or pay, also called Pay or okay, is a compliance tactic used by certain companies, most notably Meta, to drive up the rates at which users consent to data processing under the European Union's General Data Protection Regulation (GDPR). It consists of presenting the user with the tracking consent notice, but only allowing a binary choice; either the user consents to the data processing or they are required to pay to use the service, which is otherwise free to use if data processing is consented to. The tactic has been criticised by privacy advocates and non-governmental organisations such as NOYB and Wikimedia Europe, who claim that it is illegal under GDPR. On 17 April 2024, European Data Protection Board released a non-binding opinion stating that in most cases, Consent or pay models do not constitute a valid consent within the meaning of GDPR.
Under the GDPR, the processing of a natural person's personal data is only allowed under six lawful bases: consent, contractual necessity, legal obligation under EU or member state law, public interest, protection of vital interest of an individual, and the processor's legitimate interest. [1]
When the GDPR first came into force in 2018, Meta justified its processing of personal data by claiming that its terms of use constitute a contract under which the user consented to the processing of personal data. [2] [3] However, this was challenged by an Austrian privacy activist Max Schrems who successfully argued that contractual necessity was not a valid basis of data processing when it comes to personalised advertising. [4] In response to this ruling, Meta changed its lawful basis for personal data processing from contractual necessity to legitimate interest, which was also in turn found not to be a valid basis when it comes to the processing of personal data for targeted advertising. [5] [6] Meta then changed its lawful basis to consent, but chose to implement the consent in a way where the users who consent to personalised advertising may use the service for free, but the users who do not are required to pay a monthly subscription to continue using the service. [6]
The critics of this consent model have named it 'Pay or okay', claiming that the monthly fee is disproportional and that the users are not able to withdraw their consent to tracking as easily as it is given, which the GDPR requires to be the case. Massimiliano Gelmi, a data protection lawyer at NOYB, has stated that: "The law is clear, withdrawing consent must be as easy as giving it in the first place. It is painfully obvious that paying €251,88 per year to withdraw consent is not as easy as clicking an 'Okay' button to accept the tracking." [7] [8]
On 17 April 2024, the European Data Protection Board released a non-binding opinion stating that in most cases, Consent or pay models do not constitute a valid consent within the meaning of GDPR. [9]
On 1 July 2024, European Commission announced that it has opened an investigation against Meta under the provisions of the Digital Markets Act, with the preliminary findings claiming that Meta's approach is not in compliance with the Digital Markets Act, an assertion that Meta has disputed. [10]
Although Meta has faced most of the scrutiny and criticism regarding the use of 'Pay or okay', other companies have also been utilising the tactic. The Austrian Data Protection Authority has found that derStandard.at, a German-language newspaper, has acted unlawfully by using 'Pay or okay' while other sites were also accused of doing the same, including spiegel.de, zeit.de, heise.de, faz.net, krone.at, and t-online.de. [11]
The Office of the Data Protection Commissioner (DPC), also known as Data Protection Commission, is the independent national authority responsible for upholding the EU fundamental right of individuals to data privacy through the enforcement and monitoring of compliance with data protection legislation in Ireland. It was established in 1989.
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Personal data, also known as personal information or personally identifiable information (PII), is any information related to an identifiable person.
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Privacy law is a set of regulations that govern the collection, storage, and utilization of personal information from healthcare, governments, companies, public or private entities, or individuals.
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The Interactive Advertising Bureau (IAB) is an American advertising business organization that develops industry standards, conducts research, and provides legal support for the online advertising industry. The organization represents many of the most prominent media outlets globally, but mostly in the United States, Canada and Europe.
The General Data Protection Regulation, abbreviated GDPR, or French RGPD for Règlement général sur la protection des données) is a European Union regulation on information privacy in the European Union (EU) and the European Economic Area (EEA). The GDPR is an important component of EU privacy law and human rights law, in particular Article 8(1) of the Charter of Fundamental Rights of the European Union. It also governs the transfer of personal data outside the EU and EEA. The GDPR's goals are to enhance individuals' control and rights over their personal information and to simplify the regulations for international business. It supersedes the Data Protection Directive 95/46/EC and, among other things, simplifies the terminology.
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The ePrivacy Regulation (ePR) is a proposal for the regulation of various privacy-related topics, mostly in relation to electronic communications within the European Union. Its full name is "Regulation of the European Parliament and of the Council concerning the respect for private life and the protection of personal data in electronic communications and repealing Directive 2002/58/EC ." It would repeal the Privacy and Electronic Communications Directive 2002 and would be lex specialis to the General Data Protection Regulation. It would particularise and complement the latter in respect of privacy-related topics. Key fields of the proposed regulation are the confidentiality of communications, privacy controls through electronic consent and browsers, and cookies.
NOYB – European Center for Digital Rights is a non-profit organization based in Vienna, Austria established in 2017 with a pan-European focus. Co-founded by Austrian lawyer and privacy activist Max Schrems, NOYB aims to launch strategic court cases and media initiatives in support of the General Data Protection Regulation (GDPR), the proposed ePrivacy Regulation, and information privacy in general. The organisation was established after a funding period during which it has raised annual donations of €250,000 by supporting members. Currently, NOYB is financed by more than 4,400 supporting members.
The gathering of personally identifiable information (PII) is the practice of collecting public and private personal data that can be used to identify an individual for both legal and illegal applications. PII owners often view PII gathering as a threat and violation of their privacy. Meanwhile, entities such as information technology companies, governments, and organizations use PII for data analysis of consumer shopping behaviors, political preference, and personal interests.
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The General Data Protection Regulation (GDPR) is a European Union regulation that specifies standards for data protection and electronic privacy in the European Economic Area, and the rights of European citizens to control the processing and distribution of personally-identifiable information.
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