Meta is on thin ice with the European Commission after being warned it could be slapped with daily fines starting June 27, if its changes to the pay-or-consent system fail to meet compliance demands. The warning came on Friday and followed a €200 million ($234 million) fine imposed two months ago for violations of the Digital Markets Act (DMA). That law was introduced to reduce the power of dominant tech platforms and prevent them from locking out competitors. According to Reuters, the Commission, which handles competition issues across the EU, said the updated model Meta launched in November 2023 broke the DMA between then and November 2024. That system allowed users on Facebook and Instagram to either pay for an ad-free version or use the free version while agreeing to be tracked for advertising purposes. The company has since adjusted the model to reduce the use of personal data, but regulators are still not convinced the tweaks are enough. Commission questions Meta’s limited changes A spokesperson for the Commission said the updates made so far are minor and still being reviewed. “The Commission cannot confirm at this stage if these are sufficient to comply with the main parameters of compliance outlined in its non-compliance Decision,” the spokesperson said. They added that if Meta doesn’t fall in line by next summer, daily fines could begin, totaling up to 5% of Meta’s global daily turnover. Meta defended the model and said the way it’s offering users a choice between an ad-supported version and a subscription version is standard business practice across Europe. In a statement, the company said, “A user choice between a subscription for no ads service or a free ad-supported service remains a legitimate business model for every company in Europe, except Meta.” Meta also accused the Commission of unfair treatment. The company claimed that the rules were being changed midway through negotiations and that it was being singled out. “We are confident that the range of choices we offer people in the EU doesn’t just comply with what the EU’s rules require, it goes well beyond them,” Meta added. The Commission pushed back hard on that accusation. Officials insisted the DMA is being applied equally to all large platforms doing business in the EU, regardless of whether they’re American or not. “We have always enforced and will continue to enforce our laws fairly and without discrimination towards all companies operating in the EU, in full compliance with global rules,” the spokesperson said. Meta ramps up AI team with major hires from OpenAI and DeepMind While dealing with regulatory heat in Brussels, Meta is throwing big money at AI talent back in the US. The company just hired Trapit Bansal, a major figure in the AI world who recently left OpenAI. Bansal joined Meta’s AI superintelligence team, which is working on advanced reasoning models that could rival top systems like OpenAI’s o3 and DeepSeek’s R1. Bansal’s LinkedIn confirms he left OpenAI in June. He had been with the company since 2022 and helped launch its reinforcement learning efforts alongside Ilya Sutskever. He is credited as a key contributor to OpenAI’s early reasoning model, known as o1. An OpenAI spokesperson, Kayla Wood, confirmed Bansal’s departure. At Meta, Bansal joins a growing team that’s already pulled in names like Alexandr Wang, the former CEO of Scale AI, and may soon include Nat Friedman and Daniel Gross. The company is reportedly working on a next-gen reasoning model and is building a powerhouse team to get there. Bansal won’t be alone. He’s joining other recent Meta recruits including Lucas Beyer, Alexander Kolesnikov, and Xiaohua Zhai, all of whom recently left OpenAI. They’ll work alongside Jack Rae, who previously worked at Google DeepMind, and Johan Schalkwyk, who led machine learning at the AI startup Sesame. That info came from The Wall Street Journal and Bloomberg. Meta has been offering $100 million compensation packages to lure top AI researchers. It’s not clear what Bansal was offered, but it was enough to get him to walk away from OpenAI. The company doesn’t currently have a public reasoning model, but with this team, it’s clearly aiming to build one that can go head-to-head with industry leaders. Cryptopolitan Academy: Want to grow your money in 2025? Learn how to do it with DeFi in our upcoming webclass. Save Your Spot
