Regulators suspect the social network of using advertising data, collected from advertisers on its platforms, to compete with them in markets where it is also present.
Double warning shot for Facebook. Brussels and London announced simultaneously on Friday the opening of two investigations into the alleged anti-competitive practices of the American social network. The European regulator and the British regulator suspect Mark Zuckerberg’s company of using advertising data, in particular collected from advertisers present on its platforms, in order to compete with them in markets where it is present. Over 7 million businesses advertise their services on Facebook.
“In today’s digital economy, data cannot be used in a way that distorts competition”, Said Executive Vice President for Competition Policy Margrethe Vestager in a press release.
The UK Competition and Markets Authority (CMA) is also investigating whether Facebook is using the data it collects to harm its competitors in order to obtain “An unfair competitive advantage in online advertising and online dating services“. “We will work closely with the European Commission as we each investigate these issues. We will also continue to coordinate with other agencies to address these global issues.», Declared Andrea Coscelli, Director General of the CMA.
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Facebook Marketplace targeted
In particular, the European Union and the United Kingdom wish to determine whether the social network is promoting its online classifieds service “Facebook MarketplaceBy promoting it for free to its 2.8 billion users worldwide. Launched in 2016, the Facebook Marketplace allows its users to sell or buy products at no cost. This “The good cornerMark Zuckerberg’s version now attracts more than 250 million users per month, the company revealed in its report for the first quarter of 2021. Nearly one billion Facebook users have already used the portal. Facebook Dating, the social network’s digital dating service, is also in the sights of regulators.
The European Commission had sent in recent weeks to the digital advertising giant and its rivals a detailed questionnaire in order to identify potential anti-competitive practices. “Facebook collects a wealth of data on user activity on its social network and beyond, allowing it to target specific customer groups. We will examine in detail whether this data gives Facebook an unfair competitive advantage.», Specifies Margrethe Vestager. No legal deadline is foreseen for the closure of the European investigation. Its duration will depend in particular on the degree of cooperation of Facebook.
In recent months, the Gafams have been accumulating legal proceedings around the world. The European Commission recently continued its action against Apple after finding that the group was breaking competition rules through its AppStore policies. In addition, since July 2019, it has been investigating Amazon’s behavior towards third-party sellers on its marketplace. The e-commerce giant is suspected of using the data it collects to promote its own products.
In the United States, Facebook and Google are the subject of lawsuits launched by the Department of Justice and attorneys general in several states. They suspect Google of manipulating the search results in its Search tool to control the prices of the online advertising market to the detriment in particular of newspaper publishers.
In 2020, Facebook, Google and Amazon shared nearly 80% of digital advertising revenue in the global market. Digital now represents more than half of advertisers’ investments.