Is access to social media platforms like Facebook, WhatsApp and Instagram really free? - The Meta case

The Italian tax authorities have issued a VAT assessment of 870 million euros against the US group Meta for the period 2015 to 2021. They consider that there is an exchange agreement between the users and the platforms operated by the Meta group, such as Facebook, on the basis of which Meta owes the VAT on the value of the access to the respective platform. Accordingly, the users are in fact paying with their data for access and for the use of the group's platforms. The case is also interesting for Swiss companies that provide private users in the EU area with free (or very cheap) online access, e.g. to information platforms, and in doing so retrieve/economically use customer data.  


Various social media platforms such as Facebook, WhatsApp or Instagram belong to the Meta Group. These platforms are accessed and used by millions of people worldwide. From the perspective of the Meta Group and probably also in the perception of many users, access to these platforms is granted free of charge. In particular, users do not owe any payment of an access fee or anything similar. Rather, the users' consent to the evaluation and marketing of their personal data by the Meta Group is sufficient for the granting of access, whereby this is usually done by agreeing to the terms and conditions of the respective platform. If consent to the GTC is refused, this usually means that the persons concerned are denied access to the desired platform.

Specifically, as far as can be seen, the Meta Group does not use the data directly, but indirectly: By evaluating user data such as gender, age, locations, devices used, likes, pages visited, etc., third-party advertising can be targeted and tailored to the respective user. Thus, advertising revenues account for over 95% of Facebook's turnover. In this way, user data is ultimately (indirectly) monetized.

What does this (possibly) mean for VAT?

Based on the EU VAT Directive, the provision of goods or services for consideration is subject to VAT. It should be noted that the term "consideration" does not only mean money. Rather, payment in kind can also be received. If the payment for a service is made in kind, it is commonly referred to as a barter relationship in which the market value of each service is regarded as payment for the other service.

With regard to the specific case, the Italian tax authorities also take the view that access to the platform is only supposedly free. This is because users pay with the value of their data. This means that the Italian authorities attribute a market value to the user data, probably with the idea that they represent an essential element for the financial success of the Meta Group: Without the data, a targeted placement of advertising would not be possible and thus the advertising on the platforms would not be as interesting for third-party providers, so that advertising revenues without the use of the data would, if not collapse, then be significantly lower.

The service "granting access to platforms/digital content" is likely to be an electronically supplied service according to the usual VAT rules (no significant human action is required on the part of Meta to enable access). The place of supply is determined according to Art. 58 of the EU VAT Directive. Accordingly, in all cases in which the users are resident in Italy, Italy is deemed to be the place of supply. And since the majority of users are likely to be private individuals, Meta (or the group company operating the platform) is responsible for settling the VAT with the Italian authorities (this requires either direct VAT registration in Italy or registration via the One Stop Shop). The basis of assessment for the service "granting access to platforms/digital content" provided by Meta would therefore be the market value of the data received.

Questions and possible consequences

The case is not entirely simple in various respects and raises many questions that the courts will have to answer. The most important question is how exactly the market value of individual data is to be measured (e.g. is all data worth the same or is the data of certain groups of people, e.g. data of celebrities/influencers more valuable than data of "normal" users). If a market value is attributed to the data, any company that grants private users free online access to information across borders and thereby makes economic use of customers' data must check whether and to what extent VAT registrations are necessary in the states where the users are located. It may also be advisable to charge a fee for online access (which is then offset against the value of the data) and/or, if possible, to seek a ruling with the respective tax authorities in the relevant states in order to achieve legal certainty on the basis of assessment.

Ultimately, questions also arise from the point of view of the users: do they themselves now become potentially taxable entrepreneurs if, conversely, they receive access to digital content/platforms as remuneration for their consent to data collection and exploitation?


The case is of outstanding importance, not only for Meta and because of the horrendously high amount at stake. Because if the court follows the argumentation of the Italian authorities, it is foreseeable that other EU member states will probably not hesitate to take the same course against Meta, which is likely to have enormous additional financial consequences for the company. Switzerland could also follow suit, and not just against Meta: any company that links private consumers' access to certain services to consent to the use of personal data, from Google to the local supermarket that issues a loyalty card, is potentially affected.