The European Commission said on Monday it had warned Facebook’s parent company Meta that it was breaking EU antitrust laws by distorting competition in online classifieds markets and abusing its dominant position. The Commission said in a preliminary statement that it would investigate further and could fine up to 10% of the company’s annual global turnover if there is sufficient evidence of a breach of EU rules.
“The claims made by the European Commission are unfounded,” Meta spokesman Tim Lamb said in a statement. “We will continue to work with regulators to demonstrate that our product innovation is consumer and competition friendly,” Lamb added.
Sources familiar with the matter told Reuters last month EU antitrust authorities were bring charges against Meta for using customer data and linking its classifieds service to its social network.
The commission said Monday it fears that Meta imposed “unfair terms and conditions” on competitors of its own classifieds service, Facebook Marketplacewho want to advertise on their social networks Facebook or Instagram.
Last month, The European Commission said that EU regulators want broader rules defining the market power of companies that give more weight to innovation and indications of what digital markets are. The move was prompted in part by the growing power of tech giants.
Known as the EU Market Definition Notice, the rules date back to 1997 and help regulators measure a company’s pricing power in a merger or its power to shut out competitors in an antitrust case.
The information can help regulators decide whether to require concessions from a company. Businesses and academics have in recent years criticized EU antitrust laws as inadequate, particularly in relation to merger deals and the market power of US tech giants.
The EU’s competition authority launched an investigation into Facebook in June last year, focused on whether the social network was unfairly using advertisers’ data to compete with them in the online classifieds space.
© Thomson Reuters 2022
