Facebook Confronts Antitrust Investigations
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UK Regulators and the European Commission have opened two separate antitrust investigations on Facebook that would examine and determine if they are giving an unfair advantage in classified advertising. In addition to investigating classified ads in the Facebook Marketplace, UK Regulators plan to observe Facebook’s dating service.
Facebook Marketplace is a platform that allows users to purchase and sell items including furniture, clothing, and many more. With these alleged classified ads in place, Facebook could potentially face large fines and additionally receive pressure to change its business model, as the lawsuit brought by the US government is focusing on this aspect.
The European Commission have stated their worries regarding how Facebook could potentially use their data from competing businesses with intentions to "help Facebook Marketplace outcompete them." (Business Insider)
Margrethe Vestager, the European Commission’s competition head, has stated how “Facebook collects vast troves of data on the activities of users of its social network and beyond, enabling it to target specific customer groups.” (CNN). The European Commission plans on looking into “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.” (CNN).
A spokesperson for Facebook said that the company believes that due to the “highly competitive” nature of Facebook Marketplace, these allegations are “without merit” (Business Insider). The spokesperson continued to claim how they “are always developing new and better services to meet the 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.”
Though Facebook has promised to fully cooperate, this is not the first time they experienced these investigations. In fact, the US has placed intense antitrust observations on Facebook. In December of 2020, the FTC and 48 attorneys have filed two separate lawsuits against Facebook in attempts to spin off its subsidiaries (Business Insider).
Following the European Commission and the UK Regulators, the Competition and Markets Authority (CMA) has additionally announced its probe; they plan on focusing their investigations on both Facebook Marketplace and Facebook Dating.
Andrea Coscelli, the CMA Chief Executive, has stated how "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." (Business Insider).