Facebook faces new antitrust investigations from across Europe

Thomas Catenacci, DCNF

U.K. and European Union regulators announced they have opened similar sweeping antitrust investigations into massive U.S. social media company Facebook on Friday.

Both investigations will examine whether Facebook has violated antitrust laws in its use of advertising data and how its marketplace is embedded to its platform, according to the announcements Friday. The fairness and competition probes were launched by the U.K. Competition and Markets Authority (CMA) and the European Commission, which both said they would work closely.

“We intend to thoroughly investigate Facebook’s use of data to assess whether its business practices are giving it an unfair advantage in the online dating and classified ad sectors,” CMA Chief Executive Andrea Coscelli said in a statement Friday. “Any such advantage can make it harder for competing firms to succeed, including new and smaller businesses, and may reduce customer choice.”

While the investigations will be very similar, the CMA probe will examine whether Facebook has misused advertising data to bolster its online dating service introduced in Europe in 2020. The CMA’s investigation into Facebook Dating will mirror its and the European Commission’s investigation into Facebook Marketplace.

The European Commission didn’t mention Facebook Dating in its announcement Friday.

“We will look in detail at whether this data gives Facebook an undue competitive advantage in particular on the online classified ads sector, where people buy and sell goods every day, and where Facebook also competes with companies from which it collects data,” European Commission Executive Vice-President Margrethe Vestager said in a statement. “In today’s digital economy, data should not be used in ways that distort competition.”

Vestager noted that Facebook is used by 3 billion people monthly while 7 million firms advertise on the platform. The company’s data collection allows it to target specific groups of people with tailored advertisements.

The European Commission said it will investigate whether Facebook’s dominance harms competition in competing marketplaces. The commission worried the company can use “precise information” about users’ preferences obtained from advertisement activities to adapt and improve its marketplace service.

“We are always developing new and better services to meet evolving demand from people who use Facebook. Marketplace and Dating offer people more choices and both products operate in a highly competitive environment with many large incumbents,” Facebook told CNBC in a statement. “We will continue to cooperate fully with the investigations to demonstrate that they are without merit.”

The investigations are just the latest major antitrust probes into Facebook. In 2019, the U.S. Department of Justice opened an antitrust investigation into Facebook while 47 state attorneys general announced their own probes into the Big Tech company.

In December, the Federal Trade Commission sued Facebook over alleged anticompetitive conduct.

Facebook did not immediately respond to a request for comment.

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