The European Union plans to proceed with an antitrust investigation into Meta based on the way it its social network is linked to its classified ads service.
Users automatically gain access to the Facebook Marketplace service, but the concern is the company potentially pushes aside competing classified-ad services. Not just on Facebook, but also on Instagram.
The EU’s Statement of Objections also points to imposing "unfair trading conditions," which are related to how it uses data gleaned from rival online classified ads services.
The company’s terms and conditions authorize Meta to use advertising data from third parties to benefit its Marketplace service, according to the EU document. The EU states that using ad-related data from competitors for the benefit of Facebook Marketplace are “unjustified, disproportionate and not necessary for the provision of online display advertising services on Meta's platforms.”
The EU warned that the company could be breaching antitrust laws and plans to “further investigate.” The fine could be up to 10% of the company's annual global revenue from the service, if there is “sufficient evidence of an infringement.”
European Union's antitrust chief Margrethe Vestager stated concern that Meta ties its social network Facebook to its online classified ad services, Facebook Marketplace.
"This means Facebook users have no choice but to have access to Facebook Marketplace," she stated.
Tim Lamb, Meta’s head of competition in Europe, the Middle East and Africa, said in a statement to Semafor that the "claims made by the European Commission are without foundation,” and the company will “continue to work with regulatory authorities to demonstrate that our product innovation is pro-consumer and pro-competitive."
If confirmed, these practices would infringe Article 102 of the Treaty on the Functioning of the European Union (TFEU) that prohibits the abuse of a dominant market position.