On Monday, the European Commission accused Meta of going against its antitrust laws by using its Facebook Marketplace to promote ads and distort outside competition. The commission warned Meta of the breach in an official statement and said if the company is found guilty, it could receive a fine of up to 10% of its annual global turnover.
In a complaint first filed last year, the commission accused Meta of using its power in the tech industry to incorporate online classified ads into its business and said this caused unfair trading conditions on rivals “for its own benefit.”
“With its Facebook social network, Meta reaches globally billions of monthly users and millions of active advertisers,” EU Antitrust Commissioner Margrethe Vestager said in the antitrust statement. “Our preliminary concern is that Meta ties its dominant social network Facebook to its online classified ad services called Facebook Marketplace,” meaning “Facebook users have no choice but to have access to Facebook Marketplace.”
By tying the Marketplace to Facebook, the commission said users on the media platform have automatic access to the Marketplace, “whether they want it or not.”
Facebook’s Marketplace launched in 2016 and is reportedly used by 800 million people to buy and sell items in 70 countries, but it was first placed under scrutiny by the EU Commission in 2019. The commission eventually launched an investigation in June last year to determine if Meta was using customers’ data on the platform to compete with advertisers unfairly.
A source familiar with the matter told Gizmodo that Meta doesn’t use advertising data from competitors. They went on to say that the company provides users with the option to use Marketplace, which they said provides more choices for consumers.
The EU Antitrust policy “encourages efficiency and innovation and reduces prices,” according to the official site. It adds, “ To be effective, competition requires companies to act independently of each other, but subject to the competitive pressure exerted by the others,” something the commission claims Meta’s Facebook Marketplace has not done.
The platform is regularly used by nearly three billion people who have immediate access to Facebook Marketplace, and the commission is working to assess if Facebook violated its competition law. The antitrust law was created to maintain competition in the EU through anti-competitive conduct regulations to ensure companies don’t create monopolies in the market.
“In today’s digital economy, data should not be used in ways that distort competition,” Vestager told Reuters last year. “We will look in detail at whether this data gives Facebook an undue competitive advantage in particular on the online classified ads sector, where people buy and sell goods every day, and where Facebook also competes with companies from which it collects data.”
Meta says it will review the commission’s complaints and is fully cooperating with the investigation. “The claims made by the European Commission are without foundation. We will continue to work with regulatory authorities to demonstrate that our product innovation is pro-consumer and pro-competitive,” a Meta spokesperson said in an emailed statement to Gizmodo.