BRUSSELS: EU consumer authorities told Facebook owner Meta on Monday to take action to assuage European consumer groups' fears over its new "pay or consent" model or face further action.
Launched late last year, Meta's system means users have to pay to avoid data collection, or agree to share their private data with Facebook and Instagram to keep using the platforms for free.
European consumer groups including in France and Spain filed complaints to the network of consumer protection authorities (CPC) over the pay-for-privacy model.
Now national consumer protection authorities in Europe have sent a letter to Meta, warning the model's roll-out "could potentially be considered unfair and contrary".
There are concerns Meta misled or confused consumers with its language, different screens and other practices as it rolled out the new scheme.
Meta has until September 1 to reply to the letter and to offer solutions.
EU regulators in the European Commission coordinated the action with the CPC network.
"If Meta does not take the necessary steps to solve the concerns raised, CPC authorities can decide to take enforcement measures, including sanctions," the commission said in a statement.
Meta faced fierce scrutiny over the model amid concerns over users' privacy.
Earlier this month, EU regulators accused Meta of violating the bloc's new competition rules with the model that Brussels said forced a "binary choice" on users.
If the breach is confirmed, it could mean hefty fines for the US giant.
A Meta spokesperson defended the model, insisting it adheres to the rules.
"Subscriptions as an alternative to advertising are a well-established business model across many industries," the spokesperson said.
"Subscription for no ads follows the direction of the highest court in Europe and we are confident it complies with European regulation."
The European Consumer Organisation welcomed the latest move against Meta's initiative.
Agustin Reyna, director general of the umbrella group for European consumer groups, urged Meta "to change its pay-or-consent choice screen as soon as possible and in a way that provides consumers with a fair and freely-given choice".
Meta and the EU are at loggerheads over the bloc's tougher rules.
The company last week said it would delay the release of its most powerful generative AI models in Europe because of what it called unpredictable EU regulation.
Last year Meta delayed the release of its Twitter alternative Threads by several months in the EU.