Meta faces hefty EU antitrust fine over classified ads practices

Meta faces a hefty European Union (EU) fine over its alleged efforts to dominate the classified advertising market, as Brussels pushes to crack down on anticompetitive practices among the world’s biggest technology companies.
EU regulators will claim Facebook’s parent company links its free Marketplace services with the social network in an effort to undermine its rivals, said people familiar with the matter.
The EU’s decision could come as early as next month, said three senior people with direct knowledge of the matter, and would mark one of the final investigations overseen by Margrethe Vestager, the outgoing competition chief.
The commission declined to comment on the case.
Meta also declined to comment but pointed to an earlier statement that said: “The claims made by the European Commission are without foundation. We continue to work with regulatory authorities to demonstrate that our product innovation is pro-consumer and pro-competitive.”
This antitrust probe was launched in 2019 after accusations from rivals that Facebook was abusing its dominant position by offering free services while profiting from data, mostly from businesses, that it collects on the platform.
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In December 2022, the European Commission provided initial findings that Meta was distorting competition in the online classified ads market, as well as using the data accessed from businesses for free to then sell ads to users.
Meta can appeal against the case. If the tech giant is found guilty, it could face penalties of up to 10 per cent of its global annual revenue, which in 2023 came to nearly $135 billion (€121 billion). Regulators however typically issue much lower sanctions.
The tech giant has argued that Facebook Marketplace operates in a highly competitive landscape and does not use data from rivals on the platform to compete against them, the people familiar with the company’s position said.
Commission president Ursula von der Leyen is preparing her team to start the next five-year cycle at the EU’s executive body, which could delay an announcement further, the people familiar said.
Ms Von der Leyen said on Tuesday that Spain’s Teresa Ribera will take over from Ms Vestager as the bloc’s antitrust chief.
Ms Vestager, who is preparing to leave by the start of November, was keen to finalise this probe against Meta before she ended her decade of antitrust enforcement, the people added.
During her tenure in charge of the bloc’s competition policy, ms Vestager has repeatedly targeted the world’s biggest tech companies, with some of the toughest actions against tech giants such as Apple, Google and Microsoft.
Brussels won a landmark antitrust case against Google a week ago after the European Court of Justice, the bloc’s highest court, ruled the search giant had abused its market power by ranking its shopping services over rivals – granting itself an illegal and unfair advantage.
That same day, the EU’s top court ordered Apple to pay €13 billion in back taxes, overturning a previous ruling. The two decisions were seen as a victory for Ms Vestager.
Facebook Marketplace, launched in 2016, is a popular platform to buy and sell second-hand goods, especially household items such as furniture. However, new entrants in specialist markets, such as fashion, have emerged as competitors in recent years.
Other jurisdictions are also seeking to rein in Big Tech and have cases against Meta. The UK’s Competition and Markets Authority closed a similar probe last year after Meta promised to curb the use of data it gathers from other businesses. – Copyright The Financial Times Limited 2024