‘Pay-or-Consent’ and Emerging Trends in Digital Contract Law

Abstract

Pay-or-consent ('Want to subscribe or continue using our Products for free with ads?') is the dilemma facing Facebook and Instagram users since November 2023. This innovation primarily follows the Court of Justice's strict interpretation of the GDPR in Meta v Bundeskartellamt, which ruled on several controversial issues of the data economy. These include the conditions for the lawfulness of processing users' personal data to finance 'free' social network services, the assessment of users' freely given consent as a prerequisite for access to a dominant platform service, and the admissibility of incidental findings of GDPR infringements by national competition authorities when assessing abuse of dominance cases. The article analyzes the contract law implications of the decision, which recognizes that the provision of services in exchange for personal data is not inherently incompatible with the GDPR. Simultaneously, it imposes strict conditions that require dominant platforms, such as Meta's social networks, to offer users an equivalent service without targeted advertising, to preserve their freedom to consent to data processing. To avoid undermining entrepreneurial freedom, such an alternative can be provided, if necessary, for an appropriate fee, as Facebook and Instagram have recently done in Europe, opening up new problematic scenarios for scholars to address. This article then focuses on the conditions that ensure a real choice between payment and consent, examining what constitutes an appropriate fee and when it is necessary. We conclude that the pay-or-okay model needs to be adapted for GDPR compliance, offering users differentiated options beyond the all-or-nothing approach to ensure that their choice is free and specific.

Keywords: Pay-or-Okay, Pay-or-Consent, Digital Contract Law, GDPR, Data Protection, Competition Law, European Private Law, Meta Platforms, Social Networks, Facebook and Instagram