The European Commission warned Facebook’s parent company, Meta, on Monday for breaching the European Union’s antitrust laws over its online classified advertising practices on the Facebook Marketplace.
Meta was found to have breached the antitrust rules by distorting competition in the markets for online classified advertisements. Further investigations are underway as the commission considers imposing a fine of 10% of the company’s global annual revenue.
At the center of the controversy is Facebook’s online marketplace that allows users to sell items through their personal accounts. The commission stated it found that the marketplace had a “substantial distribution advantage that competitors cannot match.”
“This means Facebook users have no choice but to have access to Facebook Marketplace,” Margrethe Vestager, the EU’s antitrust chief, said in a statement, according to Reuters. “Furthermore, we are concerned that Meta imposed unfair trading conditions, allowing it to use of data on competing online classified ad services.”
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Meanwhile, Meta has denied having any anti-competitive business policies, adding that the “claims made by the European Commission are without foundation,” according to a company spokesperson.
“We will continue to work with regulatory authorities to demonstrate that our product innovation is pro-consumer and pro-competitive,” the spokesperson added.
The Commission claims that Meta was abusing their dominant position by mandating unfair policies for competing for online advertising services on Facebook and Instagram.
Moreover, the executive arm of the EU believes Meta used data collected from competitors to benefit the Facebook Marketplace. The marketplace was launched over seven years ago and is now used by Facebook users in approximately 70 countries.
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