The European Commission has fined Meta, the owner of Facebook, €797. 72 million for abusing its dominant position in the market for personal social networks. The Commission found that Facebook was preferencing its online classified ads service, Facebook Marketplace, by tying it to its personal social network. This practice harms competition by giving Facebook Marketplace a substantial distribution advantage that competitors cannot match. Competitors are being foreclosed as users are automatically exposed to Facebook Marketplace whether they want it or not. Meta has 60 days to comply with the Commission’s decision and offer solutions to untie Facebook Marketplace from its personal social network.
The EU enforcer also found evidence that Meta imposes unfair trading conditions on other online classified ads service providers on Facebook and Instagram by using data generated by competitors for the benefit of its own Facebook Marketplace. Despite offering competitors unlimited use of their data, Meta was found to be using data that was collected indirectly from users’ clicks. The company now has the opportunity to propose solutions that will give users a choice regarding their exposure to Facebook Marketplace. In response to the Commission’s decision, Meta announced that it will challenge the ruling. The company believes that since the EU launched its probe on Facebook Marketplace in 2021, the market has changed with many competitors able to compete effectively.
The online ads service, Facebook Marketplace, is embedded within the Facebook social network and allows users to buy and sell goods. This integration into the personal social network has been found to impede competition in the online classified ads market. The EU Commission stated that Facebook users are automatically exposed to Facebook Marketplace, giving it an unfair advantage over competitors. Meta will now need to take steps to separate Facebook Marketplace from its personal social network, providing users with more choice in their online experience. Despite the Commission’s ruling, Meta believes that there are formidable competitors in the market, such as eBay, Leboncoin, Marktplaats, Subito, Blocket, and Finn.no.
Meta’s announcement to challenge the Commission’s decision reflects the company’s belief that the market for online classified ads has evolved since the probe was launched in 2021. The company points to the presence of strong competitors in various member states, challenging the notion that Facebook Marketplace holds an unfair advantage. Meta claims that platforms like eBay, Leboncoin, Marktplaats, Subito, Blocket, and Finn.no are market leaders in many countries and are able to compete effectively. Despite the fine imposed by the EU, Meta remains confident in its ability to defend its position in the market and continue offering services to users across Europe. The outcome of Meta’s challenge to the Commission’s decision remains to be seen as the company works to comply with the ruling within the given timeframe.
