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The European Commission has fined Meta, the parent company of Facebook, €797.72 million for breaching EU antitrust rules by tying its Marketplace online classified ads service to the Facebook social network.
In a press release, the regulators have stated that the fine takes into account the duration of the infringement and the turnover of Facebook Marketplace, and has been set in line with the 2006 guidelines on fines.
There are two key issues raised by the European Commission (EC). The first is that all Facebook users get exposed to Marketplace by default. As Facebook is such a dominant force as a social network, this creates an unfair distribution advantage for Marketplace over its competitors. The second is that Facebook has a huge data advantage through selling ads, and can use the data generated through this to privilege Marketplace.
As a result of their findings, the regulators have ordered Meta to end the practices that have resulted in these unfair market conditions, and to refrain from repeating the infringement.
Meta’s response to the EU
In a response to the EC’s decision posted to their website, Meta has released a statement which states their plan to appeal the decision.
The California company said, “We built Marketplace in response to consumer demand — this decision ignores the market realities, and will only serve to protect incumbent marketplaces from competition.”
According to Meta, “The European Commission’s decision provides no evidence of competitive harm to rivals or any harm to consumers.
“This decision ignores the realities of the thriving European market for online classified listing services and shields large incumbent companies from a new entrant, Facebook Marketplace, that meets consumer demand in innovative and convenient new ways.”
Meta also refutes the claim that they use ad data to the advantage of Marketplace, stating, “But we don’t use advertisers’ data for this purpose and we have already built systems and controls to ensure that.”
This is not the first time Meta and EU regulators have clashed recently. Earlier this year the EU made moves to charge Meta under the new Digital Markets Act over its “pay or consent” model. Meta also elected not to launch its Llama 3 LLM in Europe due to concerns about the regulatory environment, as well as pausing the launch of Threads last year.
Featured image credit: Midjourney
