Facebook Under Investigation by EU and UK Competition Watchdogs

 

Competition authorities in the United Kingdom and Europe are looking into Facebook's use of advertising data to obtain an unfair edge over competitors. 

The Competition and Markets Authority is investigating whether it exploits data for its own purposes, such as Facebook Marketplace. The European Commission is investigating whether Facebook broke EU regulations by collecting data from advertisers in order to compete with them in providing classified advertisements. 

Facebook stated that it will fully cooperate and show that both the UK and EU inquiries are "without merit." 

Facebook obtains data through its digital advertising service and its single sign-on option, according to the CMA. This allows consumers to use their Facebook login credentials to sign in to other websites, services, and apps. 

The watchdog is investigating whether Facebook has been improperly using data to compete with other businesses through Facebook Marketplace, which allows businesses and users to post classified ads to sell products, as well as Facebook Dating, which was launched in Europe last year. 

The European Commission has launched a formal antitrust investigation "to assess whether Facebook violated EU competition rules by using advertising data gathered in particular from advertisers in order to compete with them in markets where Facebook is active, such as classified ads." 

"The formal investigation will also assess whether Facebook, in breach of EU competition rules, ties its online classified advertisements service "Facebook Marketplace" to its social network," it stated. 

Margrethe Vestager, the EU’s antitrust chief stated, “In today’s digital economy, data should not be used in ways that distort competition.” 

Facebook said its "Marketplace and dating offer people more choices, both products operate in a highly competitive environment with many large incumbents". 

The CMA and the European Commission said they will work closely with each other as their "independent investigations develop". 

Andrea Coscelli, chief executive of the CMA, added: "We intend to thoroughly investigate Facebook's use of data to assess whether its business practices are giving it an unfair advantage in the online dating and classified ad sectors. Any such advantage can make it harder for competing firms to succeed, including new and smaller businesses, and may reduce customer choice." 

The launching of European Competition Commissioner Margrethe Vestager's first competition inquiry into the world's largest social network is the latest battle with US digital powerhouses.