The European Commission is once again putting Facebook in its crosshairs. The vice president and commissioner of competition, Margrethe Vestager , has opened a formal antitrust investigation to assess whether the American multinational has violated the competition rules with the use it makes of advertising data collected from advertisers , to compete with them in the markets in which the internet giant is present, such as classified ads . “In today’s digital economy, data should not be used in a way that distorts competition,” recalled the Danish.
As part of its in-depth investigation, the Commission will examine in detail whether the US platform’s position on social media and online advertising allows it to harm competition in markets where Facebook is also active thanks to its social network and in particular in classified ads on the internet.
In addition, as announced by the Community Executive, the investigation will also evaluate whether Facebook links its online classified ads service, called ‘Facebook marketplace’, which allows users to buy and sell products among themselves, to their social network in violation of the European competition rules.
The European Commission is concerned about the potential distortion of competition from online classified ad services and that Facebook uses advertising data from the social network to help its own sales platform. According to Brussels, by advertising their services on Facebook, companies that compete directly with the platform can provide you with commercially valuable data that the platform can in turn use to compete with the companies that provided it. A problem that would particularly affect online classified ad providers, the platforms on which many European consumers buy and sell products.
Following a preliminary investigation, the Commission is concerned that Mark Zuckerberg’s company may distort competition in this segment by using data obtained from competing vendors to help Facebook Marketplace supplant them.
Seven million companies
“Almost 3 billion people use Facebook on a monthly basis and almost 7 million businesses advertise on Facebook in total. Facebook collects vast amounts of data about the activities of its social network users and beyond, allowing it to target specific customer groups.
We will analyze in detail whether this data gives Facebook an undue competitive advantage, particularly in the online classifieds sector, where people buy and sell products every day and where Facebook also competes with companies from which it collects data. ” the vice president explained.
If the European Commission confirms that the investigated practices may violate EU antitrust rules, the company could face a fine of up to 1% of its annual turnover, although the opening of the formal investigation does not prejudge the outcome.
The UK Competition and Markets Authority (CMA) also launched its own investigation into Facebook’s use of data on Friday. Although these are independent investigations, the European Commission has announced that it will work closely with London.