Facebook is facing a fresh pair of antitrust probes in Europe.<\/p>\n
The U.K.\u2019s Competition and Markets Authority (CMA) and the EU\u2019s Competition Commission both announced formal investigations into the social media giant\u2019s operations today \u2014 with what\u2019s likely to have been coordinated timing.<\/p>\n
The competition regulators will scrutinize how Facebook uses data from advertising customers and users of its single sign-on tool \u2014 specifically looking at whether it uses this data as an unfair lever against competitors in markets such as classified ads.<\/p>\n
The pair also said they will seek to work closely together as their independent investigations progress.<\/p>\n
With the U.K. outside the European trading bloc (post-Brexit), the national competition watchdog has a freer rein to pursue investigations that may be similar to or overlap with antitrust probes the EU is also undertaking.<\/p>\n
And the two Facebook investigations do appear similar on the surface \u2014 with both broadly focused on how Facebook uses advertising data. (Though outcomes could of course differ.)<\/p>\n
The danger for Facebook, here, is that a higher dimension of scrutiny will be applied to its business as a result of dual regulatory action \u2014 with the opportunity for joint working and cross-referencing of its responses (not to mention a little investigative competition between the U.K. and the EU\u2019s agencies).<\/p>\n
The CMA<\/a> said it\u2019s looking at whether Facebook has gained an unfair advantage over competitors in providing services for online classified ads and online dating through how it gathers and uses certain data.<\/p>\n Specifically, the U.K.\u2019s regulator said it\u2019s concerned that Facebook might have gained an unfair advantage over competitors providing services for online classified ads and online dating.<\/p>\n Facebook plays in both spaces of course, via Facebook Marketplace and Facebook Dating, respectively.<\/p>\n In a statement on its action, CMA CEO Andrea Coscelli said: \u201cWe intend to thoroughly investigate Facebook\u2019s use of data to assess whether its business practices are giving it an unfair advantage in the online dating and classified ad sectors. Any such advantage can make it harder for competing firms to succeed, including new and smaller businesses, and may reduce customer choice.\u201d<\/p>\n The European Commission\u2019s investigation will \u2014 similarly \u2014 focus on whether Facebook violated the EU\u2019s competition rules by using advertising data gathered from advertisers in order to compete with them in markets where it is active.<\/p>\n Although it only cites classified ads as its example of the neighbouring market of particular concern for its probe.<\/p>\n The EU\u2019s probe has another element, though, as it said it\u2019s also looking at whether Facebook ties its online classified ads service to its social network in breach of the bloc\u2019s competition rules.<\/p>\n In a separate (national) action, Germany\u2019s competition authority opened a similar probe into Facebook tying Oculus to use of a Facebook account at the end of last year<\/a>. So Facebook now has multiple antitrust probes on its plate in Europe, adding to its woes from the massive states antitrust lawsuit filed against it on home turf, also back in December 2020<\/a>.<\/p>\n Facebook hit with massive antitrust lawsuit from 46 states<\/a><\/p>\n<\/blockquote>\n\n \u201cWhen advertising their services on Facebook, companies, which also compete directly with Facebook, may provide it commercially valuable data. Facebook might then use this data in order to compete against the companies which provided it,\u201d the Commission noted in a press release<\/a>.<\/p>\n \u201cThis applies in particular to online classified ads providers, the platforms on which many European consumers buy and sell products. Online classified ads providers advertise their services on Facebook\u2019s social network. At the same time, they compete with Facebook\u2019s own online classified ads service, \u2018Facebook Marketplace\u2019.\u201d<\/p>\n The Commission added that a preliminary investigation it already undertook has raised concerns Facebook is distorting the market for online classified ads services. It will now take an in-depth look in order to make a full judgement on whether the social media behemoth is breaking EU competition rules.<\/p>\n Commenting in a statement, EVP Margrethe Vestager, who also heads up competition policy for the bloc, added: \u201cFacebook is used by almost 3 billion people on a monthly basis and almost 7 million firms advertise on Facebook in total. Facebook collects vast troves of data on the activities of users of its social network and beyond, enabling it to target specific customer groups. 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. In today\u2019s digital economy, data should not be used in ways that distort competition.\u201d<\/p>\n Reached for comment on the latest European antitrust probes, Facebook sent us this statement:<\/span><\/p>\n 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. We will continue to cooperate fully with the investigations to demonstrate that they are without merit.<\/p>\n<\/blockquote>\n Up til now, Facebook has been a bit of a blind spot for the Commission\u2019s competition authority \u2014 with multiple investigations and enforcements chalked up by the bloc against other tech giants, such as (most notably) Google<\/a> and Amazon<\/a>.<\/p>\n But Vestager\u2019s Facebook \u201cdry patch\u201d has now formally come to an end. (The EU\u2019s informal investigation into Facebook Marketplace had been ongoing since March 2019.)<\/p>\n The CMA, meanwhile, is working on wider pro-competition regulatory reforms<\/a> aimed squarely at tech giants like Facebook and Google under a U.K. plan to clip the wings of the adtech duopoly<\/a>.<\/p>\n The UK\u2019s plan to tackle big tech won\u2019t be one-size fits all<\/a><\/p>\n<\/blockquote>\n\n\n
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