The European Commission announced, on Monday 19 December, that it has informed Meta of its preliminary view that the company breached EU antitrust rules by distorting competition in the markets for online classified ads.
Meta is a US multinational technology company. Its flagship product is its personal social network ‘Facebook’, which allows registered users to create profiles, upload photos and videos, send messages and connect with other people. Meta also offers an online advertising service, called ‘Facebook Marketplace’, which allows users to buy and sell goods.
For the Commission, Meta is dominant in the market for personal social networks, which covers the whole of Europe, as well as the national markets for online advertising on social media.
Meta abused its dominant positions in the following two ways:
- First, Meta ties its online ads service Facebook Marketplace with its dominant personal social network, Facebook. This means that Facebook users have automatic access to Facebook Marketplace, whether they want it or not. The Commission is concerned that competitors of Facebook Marketplace could be foreclosed, as the tie gives Facebook a substantial distribution advantage that competitors cannot match;
- Second, Meta unilaterally imposes unfair trading conditions on competing online classified ad services, which advertise on Facebook or Instagram. Meta is able to use ad data from competitors for the benefit of Facebook Marketplace. In the Commission’s view, this is unjustified, disproportionate and not necessary for the provision of online display advertising services on Meta's platforms. These conditions impose a burden on competitors and only benefit Facebook Marketplace.
If confirmed, these practices would infringe Article 102 of the Treaty on the Functioning of the EU, which prohibits the abuse of a dominant market position. Sending a Statement of Objections does not prejudge the outcome of an investigation.
On 4 June 2021, the Commission opened formal proceedings into possible anticompetitive conduct by Facebook (see EUROPE 12734/20).
If, after the company has exercised its rights of defence, the Commission concludes that there is sufficient evidence of an infringement, it can adopt a decision prohibiting the conduct and imposing a fine of up to 10% of the company's annual worldwide turnover.
There is no legal deadline for bringing an antitrust investigation to an end.
Link to the case in question: https://aeur.eu/f/4q1 (Original version in French by Lionel Changeur)