Meta Platforms Inc. is reportedly set to be hit with its first Europen Union antitrust fine due to it tying Marketplace – the Facebook classified service – to Facebook.
Reuters, referencing people with direct knowledge of the matter, claims that Meta could be fined as much as $13.4 billion – 10% of its 2023 global revenue – although the EU typically doesn’t impose antitrust fines at the maximum amount possible.
The news comes 18 months after the European Commission, the European Union’s executive branch, issued a statement of objections to Meta over its business practices in the classified ad market, specifically how Meta’s business practices make it hard for competitors in the classified advertising marketing.
The statement in December 2022 highlighted two business practices that were said to have breached antitrust rules.
The first practice that drew the EC’s ire was that Facebook automatically gives access to Marketplace and doesn’t give users an option to opt out of the service. By automatically giving people access, the EC argues that it gives Facebook Marketplace an unfair edge over rivals. “The tie gives Facebook Marketplace a substantial distribution advantage that competitors cannot match,” the EC stated.
The second potential antitrust issue identified by the EC relates to how Meta deals with competition to Marketplace. While it was found that companies can promote services that compete with Facebook Marketplace by running ads on Meta’s platforms, Meta’s terms of service allow it to collect data about those ad campaigns and then use the data to benefit Marketplace.
As noted in an EC press release at the time, “if confirmed, these practices would infringe Article 102 of the Treaty on the Functioning of the European Union that prohibits the abuse of a dominant market position.”
The EC has not commented on the reports, whereas Meta reiterated previous comments.
“The claims made by the European Commission are without foundation,” a Meta spokesperson told Reuters. “We continue to work constructively with regulatory authorities to demonstrate that our product innovation is pro-consumer and pro-competitive.”
Should Meta be fined over Marketplace, it will be its first antitrust fine within the EU, but it may not be its last, as the company is facing multiple investigations.
On July 1, the EC tentatively determined that Meta breached the EU’s Digital Markets Act with a subscription offering launched last year. The EC argues that subscription offering does not provide users with a “less personalized but equivalent version” of its platforms and fails to ensure users’ right to freely consent to data collection.