The EU’s European Commission has accused Facebook Marketplace of breaching antitrust rules because the company dominates both social networks and an online classified ads market – and has been “distorting competition” by coupling the two services.
Specifically, the fact that “users of Facebook automatically have access to Facebook Marketplace, whether they want it or not,” is of concern to the EU.
The alleged breach of antitrust rules comes in the form of a European Commission Statement of Objections released on Monday, which said it had informed Facebook parent Meta that a “preliminary view” deemed the company in violation.
A Statement of Objections is the first step the Commission takes when it begins an investigation into what it believes are a violation of E.U. antitrust rules. It does not mean the outcome has been predetermined.
But if an investigation concludes that antitrust rules have been violated, the Commission has the power to impose a fine of up to 10% of Meta’s annual worldwide turnover as well as a prohibition of further rule-breaking behavior. -Variety
“With its Facebook social network, Meta reaches globally billions of monthly users and millions active advertisers,” said Margrethe Vestager, the Commission’s executive VP for competition policy. “Our preliminary concern is that Meta ties its dominant social network Facebook to its online classified ad services called Facebook Marketplace. 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. If confirmed, Meta’s practices would be illegal under our competition rules.”
The report also raised concerns that Meta is imposing “unfair trading conditions” on Marketplace competitors who advertise on Facebook and Instagram via ‘onerous terms and conditions,’ which apparently also allow Meta to use data derived from competitors to benefit the Marketplace service – which would infringe on Article 102 of the EU’s Treaty of the Functioning of the European Union.
The Commission says the length of the investigation will depend on various factors, including Meta’s cooperation.
The news is the latest blow for beleaguered Meta, which announced last month it was laying-off thousands of staffers. Last June the E.U. launched another investigation into potential anti-competitive behavior by Facebook, which is still ongoing. Then in August, the Federal Trade Commission in the U.S. filed an amended antitrust complaint against the company after its first was dismissed. -Variety
The move comes just months after the UK’s Competition and Markets Authority (CMA) ordered Meta to sell Giphy, a provider of GIFs – forcing the company to unwind a $400 million acquisition.
Tyler Durden
Tue, 12/20/2022 – 02:45
