The European Commission (EC) has launched an investigation into whether Facebook is abusing its position in the advertising market. The Commission is primarily interested in how Facebook handles the data of advertisers and whether it misuses the information obtained to compete with them in the markets where it operates. The Commission cites as an example the advertisements of users to buy and sell goods through the Facebook Marketplace.
“Facebook is used by almost three billion people every month, and a total of nearly seven million companies advertise on Facebook. Facebook collects large files of user activity on its social network and other services, allowing it to target specific customer groups,” said the commission’s vice-president and commissioner. for Competition Margrethe Vestager. “We will take a close look at whether this data gives Facebook an unfair competitive advantage,” she added.
In response, Facebook said it would cooperate fully with both the European Commission and the UK authorities. According to him, it turns out that there is no reason to investigate. “Both the marketplace and dating offer more options, with both products operating in a highly competitive environment with many large and established services,” Facebook said Reuters.
The European Commission is the European Union’s executive body with extensive powers, as well as the EU’s antitrust authority. If it concludes that a company is violating antitrust laws, it can, as a last resort, impose a fine of up to ten percent of its annual sales. Facebook had sales of $ 85.96 billion last year, so the fine in its case could amount to as much as $ 8.6 billion (over CZK 180 billion).
Companies that directly compete with Facebook can also provide commercially usable data to Facebook when promoting their services on its platform. Facebook could then use this data to compete with the companies that provided it.
“This applies in particular to online advertising providers, platforms on which many consumers in Europe buy and sell goods. Online advertising providers promote their services on the social network Facebook and at the same time compete with Facebook’s online advertising service called Facebook. Marketplace, “the commission specified. The Facebook Marketplace has been in operation since 2016 and is used to buy and sell goods in 70 countries. The EU has been dealing with it since 2019, Reuters reported.
The same investigation was opened by the British Antimonopoly Office CMA. “The European Commission is trying to work closely with this office on how the independent investigation will proceed,” the EC said in a press release.