EU Stings Meta For Nearly A Billion Bucks Over Competition-trampling Facebook Marketplace

The European Union has fined Facebook parent Meta €797.72 million ($843 million) for antitrust violations connected to its online classified service Facebook Marketplace. 

The European Commission levied the punishment after years of investigations into the tying of Marketplace to Facebook accounts and unfair trading conditions on competing online classified ad services.

In short, the Commission objects to the way Facebook users are exposed to Marketplace ads "whether they want [them] or not" due to the integration of Marketplace into the Facebook platform. It also criticizes Meta's ability to leverage its extensive advertising network "to use ads-related data generated by other advertisers for the sole benefit of Facebook Marketplace."

"Meta tied … Facebook Marketplace to its personal social network Facebook and imposed unfair trading conditions on other online classified ads service providers," EU competition chief Margrethe Vestager asserted in a statement. "It did so to benefit its own service Facebook Marketplace, thereby giving it advantages that other online classified ads service providers could not match."

"This is illegal under EU antitrust rules. Meta must now stop this behavior," Vestager added. 

Meta responds

Meta disagreed in a statement put out Thursday about the EC decision, which it said hinges largely on hypothetical harms to competitors absent any real evidence.

"The European Commission's decision claims that Meta imposes Facebook Marketplace on people who use Facebook in an illegal 'tie,'" Mark Zuckerberg's Meta replied. "But that argument ignores the fact that Facebook users can choose whether or not to engage with Marketplace, and many don't."

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The Instagram parent went on to explain that it is not imposing unfair trading conditions on other online marketplaces, contrary to what the EC concluded.

"The decision also argues that Meta could use advertising data from rival marketplaces that advertise on Facebook to compete against them with Facebook Marketplace," the tech titan argued. "But we don't use advertisers' data for this purpose and we have already built systems and controls to ensure that."

Systems, we'd like to point out, that may not have existed prior to a decision last year in the UK that raised similar concerns about Facebook Marketplace – specifically that Meta would use its Digital Display Advertising (DDA) customers' data for "purposes beyond the provision of DDA." 

To resolve the matter, Meta told the UK Competition and Markets authority it would "implement technical systems to prevent the use of certain competitor advertising data in the operation of Facebook Marketplace and the development and/or improvement of the product design, layout and/or functionality of Facebook Marketplace."

However, this only applies to advertisers who have "voluntarily opted out of their advertising data being used, or who have been proactively opted out by Meta (and who have not objected to this)."

When asked for additional information on the decision and how it plans to respond, Meta directed us back to said document. Along with the fine, the EC is ordering Meta to bring its anticompetitive conduct to an end. Meta said it plans to appeal the decision.

"This case entirely distorts competition law," Meta argued. "It is disappointing that the Commission has chosen to take regulatory action against a free and innovative service built to meet consumer demand." ®