Meta, the parent company of Facebook, is facing a potential hefty fine from the European Union (EU) over allegations of attempting to dominate the classified advertising market. The EU regulators claim that Meta links its free Marketplace services with the social network in an effort to undermine its competitors. The decision on this matter could be announced as early as next month and would be one of Margrethe Vestager’s final investigations as the outgoing competition chief.
Both Meta and the commission declined to comment on the case. However, Meta referred to an earlier statement where they stated that the claims made by the European Commission are baseless. They also mentioned that they continue to work with regulatory authorities to demonstrate that their product innovation is pro-consumer and pro-competitive.
This antitrust probe against Meta was initiated in 2019 following accusations from rivals alleging that facebook was abusing its dominant position by offering free services while profiting from data collected on the platform, mainly from businesses. In December 2022, initial findings by the European Commission suggested that Meta was distorting competition in the online classified ads market and using accessed data from businesses for free to sell ads to users.
Meta has the option to appeal against this case. If found guilty, it could face penalties of up to 10% of its global annual revenue, which amounted to nearly $135 billion in 2023. However, regulators typically issue lower sanctions than this maximum amount.
The tech giant argues that facebook Marketplace operates within a highly competitive landscape and does not use data from rivals on their platform for competitive purposes.
It is worth noting that Commission President Ursula von der Leyen is preparing her team for her next five-year cycle at EU’s executive body, which might further delay any announcement regarding this case.
Margrethe Vestager has been determined to finalize this investigation against Meta before leaving her position at November’s start after a decade of enforcing antitrust measures. Throughout her tenure overseeing competition policy within EU, Vestager has consistently targeted major tech companies such as Apple, Google, and Microsoft with some of her toughest actions against them.
Last week saw Brussels win a significant antitrust case against Google when Europe’s highest court ruled that Google had abused its market power by favoring its shopping services over competitors’ offerings—an illegal advantage granted itself by doing so. On that same day, Apple was ordered by EU’s top court to pay €13 billion in back taxes—a reversal of a previous ruling—resulting in two victories for Vestager.
facebook Marketplace was launched in 2016 and has become popular among users looking for second-hand goods like furniture. However, new players have emerged as competitors in specialized markets such as fashion over recent years.
Other jurisdictions are also taking action against Big Tech companies like Meta. For instance, last year UK’s Competition and Markets Authority closed a similar investigation after receiving assurances from Meta about limiting their use of gathered data from other businesses.
