Facebook’s “Free” Data Causes Surprise Charges

Facebook’s “Free” Data Causes Surprise Charges

An investigation by the Wall Street Journal has shown that Facebook’s free internet offers in emerging markets are leading to surprise data charges for many users. The company offers a limited version of its social media service in several countries in zero-rated packages that say they do not charge customers for the associated mobile data. However, internal company documents obtained by the Journal show that many users in countries including Pakistan, Indonesia and the Philippines have been charged anyway, due to software problems the company has known about for months and failed to correct.

To attract new users, Facebook made deals with mobile operators by which low-income users could access a limited version of its Facebook service as well as browse some other websites without paying for the associated data. Because of the software problems, many of these customers have been billed unexpectedly by their operators for using data, the report found. In many cases, prepaid users became aware of the charges only after their accounts had been completely drained of funds.

Internal Facebook documents written in the fall of 2021 show that employees have been aware of the issue, which they term “leakage”—defined as “When users are in Free Mode and believe that the data they are using is being covered by the carrier networks, even though these users are actually paying for the data themselves.”

A company spokesman said that Facebook has received reports from users about the data charges and has investigated them. “We’ve continued work trying to resolve the issue we’ve identified,” he said, adding that Facebook has mitigated most of the problem and continues to work to fix the rest. In 2021, users of Facebook’s free-data products were charged approximately US $7.8 million per month, up from about US $1.3 million in 2020, according to a Facebook document.

Another aspect of the situation is that video content is not included in the free-data offers, and while users are informed of this fact when they sign up, the notifications they are supposed to receive on their devices when they click on videos do not always work. Facebook said it is working to fix this problem, too.

Tarifica’s Take

Facebook (owned by rebranded parent company Meta Platforms) has been having a difficult time lately, and the revelation about erroneous data charges is very likely to reinforce the negative perceptions that the U.S.-based internet giant is experiencing. The recent disclosures by a whistleblower, Frances Haugen, described the company as prioritizing profit over dealing with the social, psychological and political consequences of its products. (The documents seen by the Wall Street Journal pertaining to the free-data services were not part of Haugen’s disclosures.) And Facebook Connectivity, the international initiative by Facebook to make the internet available to low-income users in developing countries, has been criticized for unfairly pushing users toward Facebook’s own websites rather than giving equal access to all sites.

The free-data program in Pakistan, Indonesia and the Philippines is part of Facebook Connectivity, and now it has apparently been harming the very people it was designed to help. While steering users to Facebook content can be construed as benefiting Facebook, causing users to be charged for putatively free services does Facebook no good at all—not even in narrowly revenue-based terms, because the money goes to the local MNOs. On the other hand, as a Facebook employee noted in the internal documents, the problem has been “easy to dismiss” because Facebook’s MNO partners have been benefiting financially from the erroneous charges.

The fact that Facebook was slow to acknowledge and deal with the problem is not to its credit and will undoubtedly hurt it in the public’s estimation. There will likely be ripple effects, as Facebook’s MNO partners may see trust eroded to some extent among their subscribers. On Facebook’s end, the free-data plan had two aims—to help gain new customers in developing countries (a key growth zone for the company), and to burnish its public image as a bringer of connectivity to the unconnected. Both of those goals may be compromised by public awareness of the unfounded charges and the company’s attitude toward them.