The European Union on Monday accused Facebook parent Meta of breaching antitrust rules by distorting competition in the online classified ads business, the bloc’s latest maneuver to curb the power of Big Tech companies.
In its complaint following an investigation launched last year, the EU’s executive commission took issue with the tech company tying its online classified ad business, Facebook Marketplace, to Facebook. It’s also concerned that Meta imposes unfair trading conditions on rivals “for its own benefit.”
Meta disputed the allegations.
“The claims made by the European Commission are without foundation,” Tim Lamb, Meta’s head of EMEA competition, said in a prepared statement. “We will continue to work with regulatory authorities to demonstrate that our product innovation is pro-consumer and pro-competitive.”
The company said it will study the complaints and is fully cooperating with the Commission’s investigation.
The commission, the 27-nation bloc’s top antitrust enforcer, said that by tying Marketplace to its social network, Facebook users automatically have access to Marketplace “whether they want it or not,” raising concerns that competitors are shut out because the tie gives Marketplace an advantage that they can’t match.
Meta also unilaterally imposes unfair trading conditions on online classified ad rivals that advertise their services on Facebook or Instagram, the commission said. It does that through “unjustified, disproportionate” terms of service that authorize Meta to use ad-related data generated from competitors to benefit Marketplace.
When the EU and Britain last year opened twin investigations into the company’s classified business, the bloc’s competition watchdog said it suspected Facebook of collecting “vast troves of data” on its users activities that enabled it to target specific customer groups.
If confirmed, the practices would be in breach of EU rules that prevent “abuse of a dominant market position.”
The commission said it’s preliminary finding is that Meta dominates the EU’s social network market as well as the online display advertising on social media in the bloc’s national markets.
Companies that breach EU antitrust rules can be hit with fines worth up to 10% of their annual global revenue. There’s no deadline to bring the investigation to an end, and companies can plead their case in writing or in an oral hearing.
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