Pay to use Facebook and Instagram? Meta mulls “alternative business model” as government pushes for privacy reforms

Meta, the parent company of Facebook and Instagram, has branded proposed reforms to the Privacy Act so extreme that platforms would consider charging users a subscription fee for their services if the changes outlined are adopted in full.

The proposed changes were detailed in a report released by Attorney-General Mark Dreyfus in February, which made more than 100 recommendations including changes that would empower users to have their personal information erased by the firms that hold it, and allow Australians to sue for invasions of privacy.

Of the report’s 116 recommended reforms, Meta takes issue with ten centred on an “overly broad” definition of targeting and personalised advertising. In its submission, Meta said the change would have drastic consequences for businesses.

“For example, even when an online service is showing a consumer content that they have asked to see (such as following an Instagram account), the activity would be covered because of the way that online service displays or disseminates the information,” Meta wrote.

“Consequently, a host of beneficial or benign business behaviours that are common across the economy would be subject to a special category of regulation beyond other uses of data, even though the risk of harm to the consumer is low.”

The issue was a key talking point for Meta’s head of privacy policy, Melinda Claybaugh, during a recent trip to lobby policymakers. In a blog post, Meta said “several” of Claybaugh’s discussions were pegged to the economic benefit the services offer small- and medium-sized businesses in Australia.

In its submission, Meta also stands in opposition to a proposed reform that would furnish Australian social media users with the right to “opt-out” of personalised advertising, which the tech giant said would “raise the cost and lower the effectiveness of advertising”, without offering many benefits to users.

The opt-out right would force some platforms to consider “alternative business models”, including “subscriptions”.

“It would undermine ad-supported business models, without any meaningful improvement in consumer choice. Consumers are already able to avail themselves of tools on Facebook and Instagram to excise specific data or specific advertisers from the ads they see,” Meta wrote.

“If consumers object to a service that is funded by the business model of ads, they can choose not to use that service.”

The submission also pushed back on proposed changes to algorithmic transparency. Meta argued the Privacy Act isn’t the “appropriate mechanism” to deliver such changes.

Even still, the submission gets on board with a number of other proposed changes, including a controversial proposed reform that would allow Australians to sue for invasions of privacy, which was strongly opposed by media companies earlier in the year.

The Right to Know coalition, which includes news publishers such as Nine, News Corp, AAP, the ABC, Guardian Australia and others, said in April that the proposed change runs at odds with “public interest”, could “undermine news reporting” and may leave press freedom in Australia hamstrung as a consequence.

Across the ad industry, many of Meta’s concerns are shared. An Australian advertising conference labelled changes to personalised advertising and the definition of targeting as an “existential threat” to the local ad industry that presents a “massive, massive problem”.

This article was first published by Crikey.