The ethical and legal implications of the “pay-or-consent” model in digital markets

In the digital economy, users often exchange personal data and attention, not money—for access to “free” online services. This implicit trade-off raises pressing ethical and legal concerns, particularly when dominant tech platforms leverage their market power to shape the terms of this exchange. This chapter critically examines the “Pay-or-Consent” model, where users choose between a paid, ad-free service and a free, data-driven alternative, through the lens of ethics and EU competition law, specifically Article 102 TFEU. While framed as a mechanism to enhance user autonomy and choice, the model often fails to deliver genuine consent due to high subscription costs, limited alternatives, and exploitative interface design. These dynamics risk reinforcing user coercion and undermining fairness, an essential principle under Article 102. The chapter explores whether the model constitutes exploitative abuse, particularly where privacy is commodified and degraded as part of dominant firms’ business strategies though the lens of ethics.