Facebook Marketplace in EU, UK Antitrust Crosshairs

The European Union and the UK have launched antitrust investigations into Facebook's use of advertising data in its classified ads business, probes that could force it to change its business model on top of hefty fines.

The European Commission and Britain's Competition and Markets Authority are investigating whether Facebook uses data from advertisers to compete with them.

The opening of European Competition Commissioner Margrethe Vestager's first antitrust probe into the world's largest social network marks her latest fight with one of the US tech giants. The EU probe confirmed what a person familiar with the situation told Reuters on May 26.

Vestager has slapped more than EUR 8 billion (roughly Rs. 70,720 crores) in fines on Alphabet unit Google and is also investigating Amazon and Apple.

Vestager will zoom in on Facebook's vast trove of data from the near 7 million companies that advertise on Facebook.

"We will look in detail at whether this data gives Facebook an undue competitive advantage in particular on the online classified ads sector, where people buy and sell goods every day, and where Facebook also competes with companies from which it collects data," she said. "In today's digital economy, data should not be used in ways that distort competition," Vestager said. Britain's Competition and Markets Authority also announced its own investigation into whether the network is abusing its dominant position in social media or digital advertising through its collection and use of data.

Facebook said it will cooperate fully with both the EU and UK investigations "to demonstrate that they are without merit."

It said its "marketplace and dating offer people more choices, both products operate in highly competitive environment with many large incumbents".

© Thomson Reuters 2021