EU Issues Major Antitrust Fine Against Meta for Facebook Marketplace

Meta, the parent company of Facebook, has been fined €798 million by the European Commission for allegedly abusing its market position to promote Facebook Marketplace, its classified ads service. According to The New York Times, the EU’s executive branch claims that Meta unfairly linked Marketplace to its social network, Facebook, and imposed restrictive terms on rival advertising platforms. The Commission has ordered Meta to end these practices.

Per a statement from the Commission, Meta’s integration of Marketplace into Facebook gives the platform an edge that competitors cannot match. Competition Commissioner Margrethe Vestager stated in an email, “to benefit its own service Facebook Marketplace, thereby giving it advantages that other online classified ads service providers could not match.” This substantial antitrust fine, the first of its kind for Meta, builds on an earlier €110 million penalty in 2017, when the company was found to have supplied incorrect data in the EU’s review of its WhatsApp acquisition.

In response, Meta has expressed its intent to appeal. According to The New York Times, the company said in a blog post that it would “comply, and will work quickly and constructively to launch a solution which addresses the points raised.” However, Meta also expressed disappointment with the regulatory action, stating that it discourages innovation in a space “built to meet consumer demand” and called for European regulators to support competitive, forward-thinking policies.

Read more: Judge Rules Meta Must Face FTC Antitrust Trial Over Instagram, WhatsApp Acquisitions

This investigation into Meta’s Marketplace practices began in June 2021, prompted by complaints from competing classified ads services. According to The New York Times, rival companies argued that Meta improperly linked Marketplace to its dominant social network and used non-public advertising data to enhance Marketplace. In addition, Meta’s presence in social media and online advertising gives it what the Commission considers a commanding advantage over other digital ad platforms within the EU.

A similar probe was conducted in the United Kingdom last year by the Competition and Markets Authority (CMA), which ended its investigation after Meta made concessions regarding how it handles advertisers’ data. The European Union’s recent fine also follows Meta’s decision to revise its controversial pay-or-consent model for Facebook and Instagram services, in response to pressure from EU antitrust and data-protection officials.

According to The New York Times, the European Commission had previously cautioned Meta that its subscription model might breach the Digital Markets Act (DMA), as it could restrict user choice over data usage. German regulators had also taken action in 2017, ordering Meta to cease tracking users outside its social network, calling such data collection practices abusive.

Meta has also initiated a legal challenge against the European Commission’s classification of Facebook Marketplace as a core platform service under the DMA, a designation that could severely restrict Meta’s ability to process user data.

As European regulators take an increasingly proactive approach to enforcing competition laws within the tech sector, the €798 million fine serves as a clear message to digital giants.

Source: The New York Times