The European Commission begins a formal investigation into Facebook. According to Brussels, the social media company may have abused its dominant position to promote its own Marketplace service.
This would put competitors in the advertising market at a disadvantage and violate European competition rules. Facebook would also use data from advertisers on the platform to compete with those same advertisers.
The marketplace is a service on which users can place personal advertisements, such as looking for or want to sell things. Facebook’s nearly 3 billion users may be more likely to opt for the service than competitors such as eBay, Marktplaats or Craigslist because of the company’s promotions. In addition, Facebook receives a lot of data via the service with which the American group could benefit from the advertising market.
The EU has already conducted a preliminary investigation and indicates that it has become concerned. For example, the committee previously sent questions to Facebook and industry peers to get an idea of the situation. The issue may later lead to a hefty fine for Facebook, but it is not yet there. “We will look in detail at whether the data gives Facebook an undue competitive advantage,” explains responsible European Commissioner Margrethe Vestager.
Until now, Facebook was the only one of the major American tech companies that Brussels had not yet conducted an official competition investigation into. This has already happened to Microsoft, Amazon, Google and Apple. The EU has previously fined Facebook €110 million for providing misleading information about the 2014 acquisition of the popular chat service WhatsApp. However, that monetary penalty was dwarfed by the billions that Google, for example, has already had to pay.
Last year, CEO Mark Zuckerberg’s company tried to make it even more difficult for Brussels to research the company. There were even lawsuits about whether or not investigators from regulators should be allowed to view certain information. Now Facebook says in a response that it will cooperate “fully” with the investigation to show that the European concerns are unfounded. “We are always developing new and better services to meet the evolving demands of people using Facebook,” the company said in a statement.
The British competition watchdog CMA has also opened an investigation into the Facebook issue. Previously, the British left these major matters largely to the European authorities in Brussels, but that is no longer possible due to Brexit. The CMA does state that it is cooperating with the European Commission’s investigation.