The European Commission is preparing to impose a large fine on Meta✴ for antitrust violations in the classified ads market. The regulator claims that Facebook✴, a subsidiary of Meta✴, is undermining competition by linking its free Marketplace service to the social network. A decision could come as soon as next month, concluding one of the latest investigations led by current antitrust chief Margrethe Vestager.
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The antitrust investigation, launched in 2019, stems from allegations that Facebook✴ was abusing its dominant position among rivals. The company offers free classified ad services while profiting from the data it collects on the platform, primarily from business users. In December 2022, the European Commission presented preliminary findings that Meta✴ distorts competition in the online classifieds market and uses freely obtained business data for targeted advertising.
Facebook✴ Marketplace, launched in 2016, has become a popular platform for buying and selling used goods, especially household items and furniture. However, in recent years, new competitors have emerged in specialized segments such as fashion. Meta✴ denies the allegations, arguing that Marketplace operates in a highly competitive environment and does not use competitors’ data to combat them. In its statement, the company said: “The claims made by the European Commission have no basis. We continue to work with regulators to demonstrate that our innovative products are in the best interests of consumers and competition.”
If found guilty, Meta✴ could be fined up to 10% of its annual global revenue, which was $135 billion in 2023. However, regulators typically impose less severe penalties. The decision in the case may be delayed as European Commission President Ursula von der Leyen prepares for the next 5-year cycle of the European Union (EU) executive body. Von der Leyen recently announced the appointment of Teresa Ribera as the new head of the EU competition watchdog, who will succeed Vestager in early November.
During her ten-year term in office, Vestager repeatedly took tough measures against giants such as Apple, Google and Microsoft. A week ago, the European Court upheld the validity of antitrust claims against Google, ruling that the company abused its dominant position by promoting its own shopping service to the detriment of competitors. On the same day, the EU court ordered Apple to pay 13 billion euros in unpaid taxes. These two decisions were seen as a victory for Vestager.
Other jurisdictions are also seeking to limit the influence of tech giants. The UK Competition and Markets Authority (CMA) closed a similar investigation into Meta✴ last year after the company pledged to limit the use of data collected from other businesses on its platform. These measures reflect a global trend towards increased regulation of digital markets and protection of competition in the technology sector.