The European Union has accused Facebook parent Meta of breaching antitrust rules by distorting competition in the online classified ads business.
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.”
In its response however, Meta disputed the allegations saying that claims made by the European Commission are without foundation,” Tim Lamb, Meta’s head of EMEA competition also added that Meta will continue to work with regulatory authorities to demonstrate that its product innovation is pro-consumer and pro-competitive.”
The company also said that 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.
Companies that breach EU antitrust rules can be hit with fines worth up to 10% of their annual global revenue.