The European Union has informed Meta Platforms Inc. that the ad-free version of Facebook and Instagram may breach the bloc’s consumer protection laws.

The CPC Network, a group of EU-based consumer protection agencies, notified the company of the development in a letter sent today. The group also asked Meta to suggest ways of bringing its business practices into compliance with the bloc’s regulations. The move comes a few weeks after the European Commission, the EU’s executive branch, tentatively concluded that the company’s ad-free tier breached a law known as the DMA. 

EU rules require tech giants to ask consumers’ permission before using their personal data to deliver targeted ads. Last year, Meta introduced a subscription plan that allows Facebook and Instagram users to opt out of personal data collection for a monthly fee. The offering also disables personalized ads.

Officials began looking into the subscription the day after it launched. According to the CPC Network, France’s Directorate General for Competition, Consumer Affairs and Fraud Prevention led the review. The concern is that the subscription may run afoul of two EU consumer protection laws known as the UCPD and UCTD.

The two regulations prohibit companies from presenting their products in a manner that misleads consumers. According to the EU, Meta may have misled users by referring to its services as “free” even though it processes personal data to deliver revenue-generating targeted ads. Additionally, the company is believed to be using “imprecise terms and language” to describe its use of consumers’ data.

“Consumers must not be lured into believing that they would either pay and not be shown any ads anymore, or receive a service for free, when, instead, they would agree that the company used their personal data to make revenue with ads,” said European Commissioner for Justice Didier Reynders. “EU consumer protection law is clear in this respect. Traders must inform consumers upfront and in a fully transparent manner on how they use their personal data.”

EU officials have also taken issue with some of Meta’s interface design choices. In particular, it’s believed that the company’s Terms of Service and Privacy Policy pages may be making it too difficult for users to access information on how their personal data is processed.

The fourth major focus of the regulatory action is the way Meta prompts consumers to choose between the new ad-free tier and the standard version of its social media platforms. The company doesn’t give consumers “a pre-warning, sufficient time, and a real opportunity to assess how that choice might affect their contractual relationship with Meta,” EU officials have determined.

Meta has until Sept. 1 to suggest ways of changing its business practices to comply with the bloc’s UCPD and UCTD consumer protection laws. According to Ars Technica, the company could be fined 4% of its annual worldwide revenue if it fails to address the EU’s concerns.

The development comes less than a month after the European Commission tentatively concluded that Meta’s ad-free subscription also breached a different piece of EU regulation known as the DMA. Under the latter law, Meta must provide a “less personalised but equivalent version” of Facebook and Instagram to users who opt out of personalized ads. The EC concluded that the company’s ad-free tier doesn’t meet that requirement. 

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