Consent or pay

Consent or pay, also called Pay or okay, is a compliance tactic used by certain companies, most notably Meta, to drive up the rates at which users consent to data processing under the European Union's General Data Protection Regulation (GDPR). It consists of presenting the user with the tracking consent notice, but only allowing a binary choice; either the user consents to the data processing or they are required to pay to use the service, which is otherwise free to use if data processing is consented to. The tactic has been criticised by privacy advocates and non-governmental organisations such as NOYB and Wikimedia Europe, who claim that it is illegal under GDPR. On 17 April 2024, European Data Protection Board released a non-binding opinion stating that in most cases, Consent or pay models do not constitute a valid consent within the meaning of GDPR.

Background
Under the GDPR, the processing of a natural person's personal data is only allowed under six lawful bases: consent, contractual necessity, legal obligation under EU or member state law, public interest, protection of vital interest of an individual, and the processor's legitimate interest.

When the GDPR first came into force in 2018, Meta justified its processing of personal data by claiming that its terms of use constitute a contract under which the user consented to the processing of personal data. However, this was challenged by an Austrian privacy activist Max Schrems who successfully argued that contractual necessity was not a valid basis of data processing when it comes to personalised advertising. In response to this ruling, Meta changed its lawful basis for personal data processing from contractual necessity to legitimate interest, which was also in turn found not to be a valid basis when it comes to the processing of personal data for targeted advertising. Meta then changed its lawful basis to consent, but chose to implement the consent in a way where the users who consent to personalised advertising may use the service for free, but the users who do not are required to pay a monthly subscription to continue using the service.

The critics of this consent model have named it 'Pay or okay', claiming that the monthly fee is disproportional and that the users are not able to withdraw their consent to tracking as easily as it is given, which the GDPR requires to be the case. Massimiliano Gelmi, a data protection lawyer at NOYB, has stated that: "The law is clear, withdrawing consent must be as easy as giving it in the first place. It is painfully obvious that paying €251,88 per year to withdraw consent is not as easy as clicking an 'Okay' button to accept the tracking."

On 17 April 2024, the European Data Protection Board released a non-binding opinion stating that in most cases, Consent or pay models do not constitute a valid consent within the meaning of GDPR.

European Commission investigation
On 1 July 2024, European Commission announced that it has opened an investigation against Meta under the provisions of the Digital Markets Act, with the preliminary findings claiming that Meta's approach is not in compliance with the Digital Markets Act, an assertion that Meta has disputed.

Other users
Although Meta has faced most of the scrutiny and criticism regarding the use of 'Pay or okay', other companies have also been utilising the tactic. The Austrian Data Protection Authority has found that derStandard.at, a German-language newspaper, has acted unlawfully by using 'Pay or okay' while other sites were also accused of doing the same, including spiegel.de, zeit.de, heise.de, faz.net, krone.at, and t-online.de.