The Commission took issue with Meta’s pairing of Facebook Marketplace with its personal social network.
Budrul Chukrut | SOPA Images | Lightrocket | Getty Images
The European Union on Monday issued Facebook parent company Meta with a list of objections over of its online classifieds business, Facebook Marketplace.
The European Commission, the EU’s executive arm, said that it found Meta breached EU antitrust rules by distorting competition in the markets for online classified ads.
The Commission took issue with Meta’s pairing of the Facebook Marketplace service, which lets users list items for sale, with its personal social network, Facebook.
It said it was concerned this arrangement gives Facebook Marketplace a “substantial distribution advantage that competitors cannot match.”
Margrethe Vestager, the Commission’s vice president in charge of competition policy, said the tie-up of Facebook with Marketplace gives users “no choice but to have access to Facebook Marketplace.”
“Furthermore, we are concerned that Meta imposed unfair trading conditions, allowing it to use of data on competing online classified ad services,” Vestager said in a statement.
“If confirmed, Meta’s practices would be illegal under our competition rules.”
Tim Lamb, head of EMEA competition at Meta, said: “The claims made by the European Commission are without foundation.”
“We will continue to work with regulatory authorities to demonstrate that our product innovation is pro-consumer and pro-competitive,” he added.
The Commission opened an investigation into Meta in June 2021, looking into “possible anticompetitive conduct of Facebook.”
Issuing a company with a statement of objections is a formal step in EU competition investigations and does not prejudge the outcome of a probe.
However, if after a company presents its defense the Commission still finds sufficient evidence of a breach, it can face potential changes to its business practices or a fine of up to 10% of global annual revenue.
For Meta, which made $117.92 billion in annual revenues in 2021, that could mean a penalty worth as much as $11.8 billion.
It would mark the latest setback for Meta, which is facing pressure from investors over its pivot to the “metaverse,” among other things. The company’s share price has fallen more than 60% this year amid a broader slump in technology stocks.
Separately Monday, the Commission closed an investigation into a partnership between Meta and Google that it earlier alleged hampered competition in advertising technology.
“Following a careful assessment of all relevant evidence, including information received from Google, Meta and other companies active in the tech sector, the Commission concluded that the evidence did not confirm its initial concerns and has therefore decided to close its investigation,” the Commission said.
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