Topline
Competition regulators from both the European Union and the United Kingdom on Friday opened formal antitrust investigations into Facebook with regards to how it handles advertising data, marking the first major antitrust action against the social media giant in Europe.
The new probe is the first EU-wide antitrust investigation that had targetted Facebook.
Key Facts
The European Commission, the EU’s executive arm, will investigate whether Facebook violated its antitrust laws by using data gathered from advertisers to compete against them in the classified ads business, the bloc announced in a press statement.
In a separate investigation, the Competition and Markets Authority—the U.K.’s antitrust regulator—announced it will examine whether Facebook gained an unfair advantage over competitors in classified ads and online dating businesses, based on how it collects data from users.
While both investigations are independent of each other, the British regulator said it seeks to “work closely” European Commission.
The European Commission noted that its preliminary investigation raised concerns that Facebook may “distort competition” by using data obtained from competing classifieds services that advertise on the social platform, to help Facebook Marketplace outcompete them.
The U.K.’s CMA wants to probe if Facebook has unfairly used the data gained from its advertising business and single login for multiple services—in particular Facebook Marketplace and Facebook Dating.
Crucial Quote
The European Commission’s Executive Vice-President in charge of competition policy, Margrethe Vestager, said: “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 today's digital economy, data should not be used in ways that distort competition.”
Key Background
The investigation into Facebook is the latest in the line of antitrust actions facing American tech giants including Apple, Google and Amazon. The EU’s probe into Facebook mirrors several similar probes into the likes of Amazon and Apple, who both operate platforms where third-party businesses offer their products and services—like Amazon’s online store and Apple’s App Store—while also competing against the same businesses with products and services of their own. Facebook in particular also faces a major antitrust probe in the U.S. led by the attorneys general of 48 states and territories along with the Federal Trade Commission. The U.S. antitrust suit is looking into Facebook’s acquisition of key former competitors Instagram and WhatsApp.
Further Reading
EU, U.K. Open First Antitrust Probe Into Facebook (Bloomberg)
