Regulators in Brussels and the UK announced formal competition investigations into Facebook on Friday in a joint assault on the social media company’s use of customer data to dominate in core markets such as digital advertising.
On Friday the Competition and Markets Authority said it was investigating whether Facebook might be “abusing a dominant position in the social media or digital advertising markets through its collection and use of advertising data”.
Separately, Brussels said it was opening a formal antitrust investigation to assess whether Facebook violated EU law “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”.
Regulators in the EU also say the probe will look into whether Facebook ties its online classified ads service “Facebook Marketplace” to its social network, in breach of EU competition rules.
Brussels and the UK have taken a similar approach to cracking down on the dominance of Big Tech since the CMA became a regulator in its own right in January. Since the start of the year the UK agency has launched investigations into Google, Apple and Facebook. The European Commission has opened its own probes into Google, Microsoft, Amazon and Apple in recent years.
The parallel Facebook investigations come as the UK prepares for legislation that will officially launch a new technology regulator within the CMA. The Digital Markets Unit will set bespoke codes of conduct for large technology companies that will be enforceable via hefty fines. The unit launched in shadow form in April, though it may face a long wait to be granted powers.
Both regulators said they intended to work closely with each other on the Facebook probes, which were first reported by the Financial Times.
Andrea Coscelli, the CMA’s chief executive, said: “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.”
He added: “We will be working closely with the European Commission as we each investigate these issues, as well as continuing our co-ordination with other agencies to tackle these global issues.”
Margrethe Vestager, the EU’s executive vice-president in charge of competition and digital policy, said: “Facebook is used by almost 3bn people on a monthly basis and almost 7m firms advertise on Facebook in total.
“Facebook collects vast troves of data on the activities of users of its social network and beyond, enabling it to target specific customer groups. We will look in detail at whether this data gives Facebook an undue competitive advantage in particular on the online classified ads sector . . . where Facebook also competes with companies from which it collects data. In today’s digital economy, data should not be used in ways that distort competition.”
A Facebook spokesperson said: “We are always developing new and better services to meet evolving demand from people who use Facebook. Marketplace and Dating offer people more choices and both products operate in a highly competitive environment with many large incumbents. We will continue to co-operate fully with the investigations to demonstrate that they are without merit.”
Source: Financial Times