Meta’s recent launch of the Threads app has captured substantial attention, stemming not only from its rapid user adoption but also from the growing concerns over potential data privacy and competition issues it may raise. Threads gained over 100 million users within a week of its launch, spanning more than 100 countries. However, the European Union (EU) has been excluded from the rollout due to concerns regarding data privacy.

One key issue revolves around how Threads is linked to Instagram, creating what some critics describe as a “captive audience.” Users are required to set up Threads using their existing Instagram accounts, and deleting Threads also necessitates deleting Instagram. This bundling approach is a concern for European regulators, as it restricts user choice and may be seen as an anticompetitive practice.

Mandatory disclosures on iOS shed light on the app’s privacy practices, indicating that Threads may collect sensitive user information to profile their digital activity. This data collection includes health and financial data, precise location, browsing history, contacts, search history, and other sensitive information. Such comprehensive data collection is not aligned with the stringent privacy regulations in the EU, making Threads incompatible with European sensitivities.

The European Commissioner for the Internal Market has identified Meta as one of the “digital gatekeepers” under the new Digital Markets Act (DMA). This designation subjects the company to stricter regulations in the EU, aiming to prevent market dominance abuses and unfair competition practices. The DMA emphasises that digital gatekeepers must not prefer their own services over those of competitors on their platforms and must ensure functional interoperability with rival instant messaging services.

Threads’ data collection practices and reliance on Instagram’s existing user base raise concerns about user consent and targeted advertising. The DMA explicitly forbids large companies like Meta from reusing personal data across products for targeted advertising without user consent, and Meta’s privacy policy indicates that it collects and uses information across its products for ad targeting.

To comply with EU regulations and play nice in the European market, Meta may need to launch Threads as a fully standalone service without requiring Instagram accounts for sign-up. However, this could potentially slow down the app’s growth and hinder its ability to capitalise on Instagram’s strength in Europe.

The issue of “self-preferencing” also arises, whereby gatekeepers promote their own products over competitors’ offerings on their platforms. The DMA prohibits this practice, as it disadvantages other businesses and stifles competition.

To address data privacy and competition concerns, Meta could allow users to create Threads accounts using just their emails, separate from their Instagram accounts. However, this might impact the app’s growth, considering the deliberate steps taken to make Threads “sticky” through integration with Instagram.

The launch of Threads by Meta has brought to the forefront significant data privacy and competition concerns, especially within the context of the EU’s rigorous regulatory landscape. The integration of Threads with Instagram and the extensive data collection practices could potentially subject Meta to regulatory scrutiny and criticism from various stakeholders. To effectively navigate these challenges, Meta might need to adjust its approach to ensure compliance with EU regulations and foster fair competition in the digital market.

Moreover, it is reasonable to anticipate that Threads may encounter similar strict compliance measures in other jurisdictions that uphold comparable data privacy and competition regulations. To address this, Meta should proactively engage with regulators in these jurisdictions, working collaboratively to address any potential concerns and guarantee full compliance with the established regulations.