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EU accuses Facebook parent Meta of distorting ads market

December 19, 2022

The EU's competition watchdog has accused tech giant Meta, which owns Facebook and Instagram, of breaching antitrust rules. An early analysis says the firm distorted competition in the online classified ads business.

Facebook, Instagram, WhatsApp und Meta
Image: M. Chang/ZUMA Press/picture alliance

The European Commission said on Monday that online giant Meta appeared to have breached antitrust rules with its online classified advertising section on Facebook.

A preliminary analysis by the commission, which oversees EU antitrust policy, found that Meta had been using its powerful social media prominence to gain an unfair advantage.

What are the allegations against Meta?

Among the main concerns was the linking of Meta's Facebook Marketplace to its Facebook social media platform, which was seen as unfair to competitors.

Users of Facebook "automatically have access to Facebook Marketplace, whether they want it or not," a statement said, creating a market distortion that rivals cannot overcome.

"The Commission takes issue with Meta tying its online classified ads service, Facebook Marketplace, to its personal social network, Facebook," said a statement.

"The Commission is also concerned that Meta is imposing unfair trading conditions on Facebook Marketplace's competitors for its own benefit."

The analysis found that Meta, which also owns messaging service WhatsApp, used data from online classified services that advertise on Facebook and Instagram to its own advantage. 

Meta denies being anti-competitive

Should the commission find that the company did cross the line, with enough evidence of infringement, it could impose a fine of up to 10% of Meta's global annual turnover. For the 12 months ending September 30, overall international revenue was $118 billion.

California-based Meta, which now has the right to respond to the accusations either in writing or in an oral hearing, denied that its practices were anti-competitive.

"The claims made by the European Commission are without foundation,'' Tim Lamb, Meta's head of competition for Europe, the Middle East, and Africa, said in a prepared statement. "We will continue to work with regulatory authorities to demonstrate that our product innovation is pro-consumer and pro-competitive."

When both the EU and Britain opened twin investigations into Meta's classified business last year, the commission also said it suspected Facebook of collecting "vast troves of data" on users' activities that enabled it to target specific customer groups.

If confirmed, that practice would break rules that prevent "abuse of a dominant market position."

rc/es (AFP, AP, Reuters)