UK and EU launch antitrust probes into Facebook Marketplace and Dating
Six months after the Federal Trade Commission called for the breakup of Facebook, both the EU and the UK have launched formal competition investigations into the social media giant.
The European Commission is opening an antitrust probe into Facebook to determine whether the company has violated EU competition rules by gathering data from advertisers to compete against them in classified ads.
The Commission also wants to investigate whether the Facebook Marketplace ad platform is unfairly tied to the social network itself. In a statement, the Commission’s Executive Vice-President Margrethe Vestager said:
The UK’s Competition and Markets Authority (CMA) has simultaneously launched its own investigation into Facebook. It’ll also focus on whether Facebook has used the data gathered from users to gain an unfair advantage over competitors.
The UK and EU probes into Facebook are independent, though the two will be working closely together. In a statement to Bloomberg, Facebook said it “will continue to cooperate fully with the investigations to demonstrate that they are without merit. We are always developing new and better services to meet evolving demand from people who use Facebook.”
Facebook Marketplace and Facebook Dating are under investigation
The European Commission is opening an antitrust probe into Facebook to determine whether the company has violated EU competition rules by gathering data from advertisers to compete against them in classified ads.
Facebook is used by almost 3 billion people on a monthly basis and almost 7 million firms advertise on Facebook in total. Facebook collects vast troves of data on the activities of users of its social network and beyond, enabling it to target specific customer groups. We will look in detail at whether this data gives Facebook an undue competitive advantage.
The UK’s Competition and Markets Authority (CMA) has simultaneously launched its own investigation into Facebook. It’ll also focus on whether Facebook has used the data gathered from users to gain an unfair advantage over competitors.
In particular, the UK’s investigation will look into how the company may have used its advertising and single sign-in services to benefits products like Facebook Marketplace and Facebook Dating. Chief Executive of the CMA Andrea Coscelli said the following in a statement:
"We intend to thoroughly investigate Facebook’s use of data to assess whether its business practices are giving it an unfair advantage in the online dating and classified ad sectors. Any such advantage can make it harder for competing firms to succeed, including new and smaller businesses, and may reduce customer choice."
If the UK’s CMA concludes that Facebook breached competition law, the company stands to be fined up to 10% of worldwide turnover. Based on 2020’s revenue numbers, that would mean a fine of up to $8.6 billion. The CMA may also issue “legally binding directions to bring the breach to an end.”
The UK and EU probes into Facebook are independent, though the two will be working closely together. In a statement to Bloomberg, Facebook said it “will continue to cooperate fully with the investigations to demonstrate that they are without merit. We are always developing new and better services to meet evolving demand from people who use Facebook.”
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