Facebook’s parent company, Meta, will be investigated for allegedly abusing its dominant position in the online classifieds market and giving undue advantages to Facebook’s service on the Marketplace. The European Commission (EC) has been the promoter of this investigation by denouncing the company this Monday.
“The Commission opposes Meta linking its online classifieds service, Facebook Marketplace, to its personal social network, Facebook. The Commission is also concerned that Meta is placing unfair trading terms on Facebook Marketplace competitors for its own benefit. “said the Community Executive in a statement
Although Brussels “does not prejudge the result of the investigation” by sending this statement of objections to Meta, it does warn that, if its suspicions are confirmed, Meta’s behavior would be anticompetitive according to European treaties, which prohibit the abuse of a position market dominant and that Meta has both in the social media market and in the advertising networks of the online markets.
Conditions of use “unjustified” and “disproportionate”
Specifically, Brussels questions that Meta has linked Facebook Marketplace to Facebook as a social network, its flagship product, since it implies that network users have automatic access to Marketplace, whether they want it or not, a “substantial advantage” that “its competitors they can’t reach.” Brussels also believes that Meta unilaterally imposes unfair conditions on other competitors of online classifieds services, both on Facebook and on Instagram, which it also owns.
The terms and conditions of use of these social media giants authorize, according to the Commission, “to provide these services on the Meta platforms.
“The conditions impose a burden on the competition and only benefit the Marketplace”
“These conditions impose a burden on competition and only benefit Marketplace,” the Commission considers. The step that the EC has taken today involves sending Meta the so-called “chart statement”, in which it informs in writing about its objections to possible monopolistic behavior and to which the company can respond in writing or request an oral hearing to presenting his point of view. There is no legal deadline to end an antitrust investigation.
The potential fine, if the Commission has just concluded that there is sufficient evidence of an infringement, can amount to up to 10% of the company’s annual worldwide turnover. In the case of Meta, in 2021 this figure amounted to almost 118,000 million dollars, so the potential sanction could be around 11,800 million.