Meta, the parent company of Facebook, Instagram, and WhatsApp, warned investors on Wednesday that European users could experience a significantly deteriorated service due to a regulatory decision by the European Commission. This follows Meta’s introduction of a “consent or pay” model, which allows users to choose between subscribing monthly or permitting Meta to combine data from Facebook and Instagram. Last week, the European Commission announced that this model does not comply with the Digital Markets Act (DMA) and imposed a €200m (£171m) fine on Meta. In response, Meta stated in its quarterly earnings report that it anticipates needing to make modifications to its model based on feedback from the EC, which could negatively impact European users and Meta’s European business and revenue. These effects could materialize as early as the third quarter of this year and may persist during the appeal process. Eric Seufert, an analyst at Mobile Dev Memo, suggested that Meta might be attempting to strategically transform European users into vocal advocates for its products amid regulatory constraints. Seufert explained to the BBC that Meta’s ultimate objective is to turn public opinion against the regulatory regime, which would diminish the product offerings accessible to EU residents. The Commission has contended that Meta’s consent-or-pay model does not enable users to genuinely consent to how their data is utilized. The body is currently evaluating another option Meta introduced last year, which the company claims uses less personal data to display advertisements. Meta was granted 60 days to comply with the DMA’s recent decision or face additional fines. Apple was also penalized €500m (£428m) last week for its App Store practices. Meta’s announcement came as it reported quarterly earnings surpassing Wall Street expectations and showcasing continued robust advertising revenue. Meta highlighted its advancements in AI technology on Wednesday. Mark Zuckerberg, Meta’s founder and CEO, stated, “We’re making good progress on AI glasses and Meta AI, which now has almost 1 billion monthly actives.” Zuckerberg added, “Our community continues to grow and our business is performing very well.” Matt Britzman, a senior equity analyst at Hargreaves Lansdown, observed that Meta has intensified its investments in AI and noted the 6% increase in daily active users. Britzman also remarked that there had been concerns about a potential slowdown in new users this year, but the strong start signaled to investors that Meta’s family of apps maintains a firm hold on users. The EC fine was announced amid what Meta referred to as an “active regulatory landscape” in its earnings report. Meta is currently defending itself in a trial brought by the US Federal Trade Commission, which alleges that Meta operates a social media monopoly by purchasing Instagram in 2012 and WhatsApp in 2014. The FTC, the leading antitrust authority in the US, asserts that Meta solidified its monopoly through these acquisitions.