The EU has put Meta Platforms Inc. (NASDAQ:META) on notice over its "pay or consent" model for Facebook and Instagram, citing potential violations of consumer protection laws.

What Happened: The EU's Consumer Protection Cooperation or CPC Network has given Meta until Sept. 1, 2024, to propose changes to its "pay or consent" model, according to a blog post on Tuesday.

The EU has labeled the model as "misleading" and "confusing" for users, and non-compliance could lead to fines.

"Consumer protection authorities assessed several elements that could constitute misleading or aggressive practices, in particular, whether Meta provided consumers upfront with true, clear, and sufficient information," the union stated.

Meta's "pay or consent" model, rolled out last year, presents users with two choices: pay up to €12.99 (approximately $14.13) per month for ad-free usage of Facebook and Instagram or agree to the collection and use of personal data for personalized ads.

The CPC initiated its investigation in response to complaints from consumer watchdog groups. These groups alleged that Meta employs confusing language to describe the paid and "free" versions of its platforms.

Meta did not immediately respond to Benzinga's request for comments.

Why It Matters: This development follows Meta's decision to reduce the subscription fee for its ad-free Facebook and Instagram services in Europe to €5.99 ($6.5) from the initial €9.99 ($10.9).

This move was aimed at addressing growing concerns of privacy and antitrust regulators.

Last month, Meta faced a complaint in Norway for using user images and posts from Facebook and Instagram to train AI models.

The Norwegian Consumer Council argued that the opt-out process violates strict EU data protection laws and that Meta uses deceptive design patterns and vague language to make opting out difficult.