The European Commission and UK regulators opened antitrust investigations into Facebook over concerns that its Marketplace service unfairly distorts competition for classified ads. Both are interested in whether or not Facebook has unfairly used ad data to compete in the classified ads market, and are collaborating as part of the investigation.
“Facebook collects massive amounts of data about the activities of users from its social network and beyond, allowing it to target specific customer groups,” Margrethe Vestager, head of competition at the European Commission, said in a statement. “We’ll look in detail at whether this data gives Facebook an undue competitive advantage, particularly in the online advertising industry, where people buy and sell goods every day, and where Facebook also competes with companies from which it collects data.”
In particular, the Commission says a preliminary investigation has raised concerns that Facebook could use data from rival ad services advertising on its platform to compete with them. The Commission and the UK Competition and Markets Authority (CMA) will now conduct in-depth formal investigations to assess these concerns.
In addition to concerns about Facebook Marketplace and classified ads, the UK CMA is also investigating Facebook’s dating service on similar grounds.
The European Commission has been scrutinizing Facebook Marketplace for years. Reuters notes that European officials sent questionnaires about the service in 2019, only for Facebook to oppose the investigation next year, arguing that the size of the EU’s document request meant it would have to hand over unrelated but highly sensitive information.
Facebook’s Marketplace service, launched in 2016, allows people to buy and sell items from locals. It is now used by 800 million Facebook users in 70 countries, according to Reuters. Rivals have reportedly complained that Facebook is giving itself an unfair advantage by advertising Marketplace for free to its 2 billion users.
This is the first time Facebook has been formally investigated by the EU, the FT noted earlier, with the case joining similar anticompetitive investigations by the bloc into companies like Apple, Google, Amazon and Microsoft. Earlier this year, the EU formally accused Apple of violating antitrust rules with its App Store policies, and last November the commission said Amazon is misusing the data it collects from third-party marketplace sellers.