BRUSSELS: The European Commission announced an antitrust probe Friday into Facebook’s use of data gathered from advertisers to see whether it gives it an unfair advantage in the online classifieds market.
“We will look in detail at whether this data gives Facebook an undue competitive advantage in particular on the online classified ads sector… where Facebook also competes with companies from which it collects data,” the EU commissioner for competition, Margrethe Vestager, said.
The formal probe follows a preliminary investigation focused on Facebook’s Marketplace classifieds service available to most of its three billion users.
Companies advertising on Marketplace have to provide data to Facebook which the Commission said led to concerns that the US internet giant “may distort competition” by using the information to “outcompete” rival providers of classifieds services.
“Facebook could, for instance, receive precise information on users’ preferences from its competitors’ advertisement activities and use such data in order to adapt Facebook Marketplace,” it said.
The EU executive is also concerned about how Marketplace is integrated into Facebook’s core social network platform — “a form of tying which gives it an advantage in reaching customers and forecloses competing online classified ads services”.
There is no deadline for the probe to be wrapped up, with the Commission saying its duration depended on factors including the complexity of the case.
The European Commission noted in its statement that former EU member Britain’s Competition and Markets Authority (CMA) also on Friday opened its own probe into the way Facebook uses data.
“The European Commission will seek to work closely with the CMA as the independent investigations develop,” it said.
Brussels last month launched another probe into Facebook, related to its buyout of a US startup, Kustomer, that specialises in helping businesses interact with customers online.
UK competition watchdog probes Facebook use of ad data
Britain’s competition watchdog said Friday it has opened an investigation into Facebook’s use of advertiser data s the EU announced a similar probe into the social media giant.
“We intend to thoroughly investigate Facebook’s use of data to assess whether its business practices are giving it an unfair advantage in the online dating and classified ad sectors,” Andrea Coscelli, head of the Competition and Markets Authority, said in a statement.
Coscelli said the CMA will be working closely with the European Commission as they each conduct their investigations.
It is the third investigation into a suspected violation of competition law in digital markets, the CMA said, noting it is also probing Google’s “privacy sandbox” and Apple’s AppStore.
The CMA said it was looking into whether Facebook “might be abusing a dominant position in the social media or digital advertising markets through its collection and use of advertising data”.
Facebook collects data from its digital advertising services, which allow another business to advertise to its users, as well as from a “single sign-on” option that allows people to use their Facebook log-in to enter other websites and apps, the CMA said.
The investigation will determine whether the US company unfairly used the data to benefit two services, Facebook Marketplace and Facebook Dating, which was launched in Europe last year.
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