Six months after the Federal Trade Commission demanded it The breakdown of Facebook, both the EU and the UK have launched formal competition inquiries into the social media giant.
Facebook Marketplace and Facebook Dating are the subject of research
the European Commission launches antitrust inquiry into Facebook to find out whether the company has infringed EU competition rules by collecting information from advertisers to compete against them through classified ads. The Commission also wants to investigate whether Facebook Marketplace’s advertising platform is unfairly tied to the social network itself. In her statement, Margrethe Vestager, Vice-President of the Commission, stated:
Nearly 3 billion people use Facebook every month, and a total of nearly 7 million businesses advertise on Facebook. Facebook collects huge data about the activities of its social network users and beyond so that it can target specific customer groups. We will examine in detail whether this information gives Facebook an undue competitive advantage.
Great Britain Competition and Market Authority
(CMA) has simultaneously launched its own investigation of Facebook. It also focuses on whether Facebook has used the information collected from users to gain an unfair advantage over competitors, in particular a UK study examining how the company has been able to use advertising and single sign-on services for products such as Facebook Marketplace and Facebook Dating. CMA CEO Andrea Coscelli said in a statement:
“We plan to thoroughly investigate the use of Facebook data to assess whether its business practices give it an unfair advantage in the online dating and classified ads industries. Such an advantage may hinder the success of competing companies, including new and small businesses. And may reduce customer choice.”
If the UK CMA concludes that Facebook is in breach of competition law, the company will be fined up to 10% of global turnover. Based on 2020 revenue figures, that would mean a fine of up to $ 8.6 billion. The CMA may also issue “legally binding instructions to terminate the violation.”
The UK and EU Facebook probes are independent, although both work closely together. In the opinion Bloomberg
, Facebook said it “will continue to fully cooperate with the surveys to show that they are not merit. We are constantly developing new and better services to meet the changing demand of Facebook users’ people.”