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By imposing unfair trading conditions on other online classified ads service providers that advertise on its platforms, the US tech giant allegedly abused its dominant position, according to the European Commission.
On Thursday, the EU fined online behemoth Meta nearly 800 million euros for violating antitrust laws by automatically granting Facebook Marketplace users access to classified ads.
By imposing unfair trading conditions on other online classified ads service providers that advertise on its platforms, the US tech giant allegedly abused its dominant position, according to the European Commission.
According to EU antitrust laws, this is unlawful. In a statement, Margrethe Vestager, the bloc’s competition chief, said, “Meta must now stop this behaviour.”
Alleging that the ruling disregarded “the realities of the thriving European market for online classified listing services,” Meta announced that it would file an appeal.
Facebook users have the option to interact with Marketplace or not, and many choose not to. In actuality, people use Facebook Marketplace voluntarily rather than out of obligation, the company stated in a statement.
It is the most recent in a series of heavy fines levied against Big Tech firms in recent years by the European Commission, the bloc’s regulator, and ranks among the top ten antitrust penalties ever levied by the 27-nation EU.
“Abusive practices”
The commission described what it called “abusive practices” by Meta, claiming that Facebook Marketplace had a “substantial distribution advantage which competitors cannot match” due to its affiliation with Facebook.
It stated that “whether they want it or not, all Facebook users automatically have access to and are regularly exposed to Facebook Marketplace.”
The commission also claimed that competitors in the classified ads service who ran ads on Facebook and Instagram were subjected to unfair conditions by Meta.
This allowed it to “use ad-related data generated by other advertisers for the sole benefit of Facebook Marketplace,” it said.
The company that owns Instagram and WhatsApp, Meta, argued that it has “built systems and controls to ensure that” and did not “use advertisers’ data for this purpose.”.
“The Commission’s decision to take regulatory action against a free and innovative service that was created to satisfy consumer demand is disappointing,” the company stated.
According to the EU, Meta has a unique obligation to avoid abusing its dominant position in the personal social network market by limiting competition.
“Gravity and duration”
In June 2021, the commission initiated formal proceedings to investigate Facebook’s potential anticompetitive behaviour. In December 2022, the commission informed Meta of its concerns, and in June 2023, the company responded.
The EU fined the company 797.72 million euros ($840 million), taking into consideration the “duration and gravity of the infringement” and the turnover of Facebook Marketplace and Meta, according to the commission.
Last year, Meta made about $135 billion in total.
Several encounters between the European Commission and Meta have occurred as part of a larger crackdown on abusive Big Tech practices.
The Digital Services Act and the Digital Markets Act, two significant laws that carry steep financial penalties for violations, have increased its toolkit of policies during the last two years.
In July the EU accused Meta of breaching the digital rules with its new “pay or consent” system. It meant users had to pay to avoid data collection or agree to share their data with Facebook and Instagram to keep using the platforms for free.
In response to pressure from EU regulators, Meta said this week that it was lowering subscription costs for completely ad-free services and giving non-paying users in the bloc the choice to receive less targeted advertisements.