EU says Meta may have breached antitrust rules with Facebook Marketplace

19 Dec 2022

Image: © weyo/Stock.adobe.com

If there is found to be a violation of antitrust rules, the EU can impose a fine of up to 10pc of Meta’s annual global turnover.

Meta may be facing a fine from the EU for distorting competition when it comes to online classified ads.

The European Commission has informed Meta of its preliminary view that the company breached EU antitrust rules by tying its classified ads service, Facebook Marketplace, to its personal social network.

It is also concerned that Meta is imposing unfair trading conditions on Facebook Marketplace’s competitors for its own benefit.

The European Commission launched an investigation into Facebook Marketplace in June 2021, probing whether it gives the company an unfair advantage over other classified services.

EU lawmakers published a statement of objections today (19 December), a step in the investigation process that involves notifying a company of objections in writing. It does not indicate a final decision.

The European Commission has preliminarily found that Meta abused its dominant market position by automatically giving Facebook users access to Facebook Marketplace, whether they want it or not. It said that this gives Facebook Marketplace a substantial distribution advantage that competitors may not be able to match.

The Commission also said that Meta is imposing a burden on competing services that advertise on Facebook or Instagram, with “unjustified, disproportionate and not necessary” conditions that authorise the company to use ads-related data from competitors.

“Our preliminary concern is that Meta ties its dominant social network Facebook to its online classified ad services called Facebook Marketplace,” said Margrethe Vestager, the European Commission executive vice-president in charge of competition policy.

“This means Facebook users have no choice but to have access to Facebook Marketplace. Furthermore, we are concerned that Meta imposed unfair trading conditions, allowing it to use of data on competing online classified ad services.”

Meta can now reply in writing to the European Commission’s concerns and request an oral hearing to present its comments on the case before representatives of the EU and national competition authorities.

“The claims made by the European Commission are without foundation,” Tim Lamb, head of EMEA competition at Meta, has said in a statement to media outlets.

“We will continue to work with regulatory authorities to demonstrate that our product innovation is pro-consumer and pro-competitive.”

The EU can issue its final decision after Meta has had an opportunity to present its case. If there is found to be a violation of antitrust rules, the EU can impose a fine of up to 10pc of Meta’s annual global turnover.

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Blathnaid O’Dea is Careers reporter at Silicon Republic

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