European Commission set to open antitrust investigation into Facebook

Inquiry to focus on classified advertising end of social media group’s business

Facebook has so far been the only US Big Tech company to have escaped a formal antitrust investigation. Photograph: AFP via Getty

Facebook has so far been the only US Big Tech company to have escaped a formal antitrust investigation. Photograph: AFP via Getty

 

The European Commission is set to open a formal investigation into alleged anti-competitive practices by Facebook as it seeks to understand whether the company is undermining rivals in classified advertising.

EU officials have already sent at least three rounds of questions to Facebook and its rivals asking whether the social network is distorting the classified ads business by promoting its Marketplace services for free to its 2 billion users.

Facebook launched its Marketplace in 2016, allowing its users to sell goods to or buy goods from each other without fees.

Facebook has so far been the only US Big Tech company to have escaped a formal antitrust investigation. The EU has previously launched investigations into Microsoft, Amazon, Apple and Google.

The launch of a formal inquiry could come in days, though the timing is still being discussed and the scope of the investigation is also being finalised, according to three senior people with direct knowledge of the case.

The European Commission declined to comment. Facebook did not immediately respond to a request for comment. In the past the company has said that it develops its services and products while complying with EU law.

Tense

Relations between Facebook and the European Commission have been tense throughout the early stages of evidence gathering, according to several people directly involved in the process. Facebook even took Brussels to court over concerns that the questions that officials were asking were too broad and invaded the privacy of the company’s employees.

Facebook is also facing a separate antitrust inquiry in the UK. The UK Competition and Markets Authority is looking into whether the social network uses data it collects to undermine rivals in online advertising.

Like the European Commission, UK regulators are likely to zoom in on Facebook’s behaviour in relation to Marketplace.

The EU’s investigation into Facebook’s practices is the latest of a string of recent antitrust investigations into Big Tech. Only weeks ago, Margrethe Vestager, the EU’s executive vice-president in charge of competition and digital policy, formally accused Apple of distorting competition by charging high fees to competing streaming services. That case is one of a number of antitrust cases currently open against Apple.

Amazon

The commission also formally pressed charges against Amazon for allegedly undermining smaller rivals on its platform. And it is also looking at potential anti-competitive behaviour by Coca-Cola.

EU regulators are also currently looking at Google’s potential anti-competitive behaviour in the adtech sector and have sent a series of questionnaires to its rivals as well. – Copyright The Financial Times Limited 2021