Facebook Marketplace violates EU antitrust law, according to the European Commission (EC). The online sales service developed by Meta is in the crosshairs of Brussels for its practices deemed anti-competitive, according to a preliminary opinion from the EC published on Monday, December 19, 2022.
A choice imposed on users
In its press release, the EU accuses Meta of distorting “competition in online advertising markets” by offering its Facebook Marketplace service automatically to all users of the social network. With Facebook, Meta occupies a dominant position in the field of personal social networks in Europe, just like “on the national markets for online display advertising on social networks”notes the EC.
Offering a marketplace to all Facebook users would therefore constitute an abuse of a dominant position. “Our preliminary expressed concern is that Meta is tying its dominant social network Facebook to its online ad services called Facebook Marketplace. This means that Facebook users have no choice but to have access to Facebook Marketplace”worries Margrethe Vestager, Executive Vice-President in charge of Competition Policy.
Of the “unfair trading conditions”
By this dominant position online, competing services could be disadvantaged because of the link between Marketplace and Facebook, which gives the social network “a substantial distribution advantage that competitors cannot match”. Market dominance that could be in direct violation of Article 102 of the Treaty on the Functioning of the European Union (TFEU).
The European Commission also accuses Meta of imposing “unfair trading conditions to competing online advertising services, which advertise on Facebook or Instagram”. Data from Marketplace competitors’ advertisements may be used by Facebook in accordance with its terms and conditions. General conditions which could be “unjustified, disproportionate and unnecessary for the provision of online display advertising services on Meta platforms”believes Brussels.
Basically, nothing is decided yet. Meta will now defend itself to avoid further fines from EU authorities. Once the US firm has been heard, and if it “there is sufficient evidence of the existence of an infringement”the EC may prohibit the behavior causing the problem and impose a sanction of up to 10% of Meta’s worldwide annual turnover.
“The claims of the European Commission are baselessdefends for his part Tim Lamb, spokesman for Meta in a press release sent to Reuters. We will continue to work with regulatory authorities to demonstrate that our innovations […] are favorable to consumers and to competition.”