Regulators in the European Union and the United Kingdom are interested in whether Facebook has unfairly used ad data to compete in the classifieds ad market, and are cooperating as part of the investigation.
Margrethe Vestager, head of competition at the European Commission, said: “Facebook collects a large set of data about the activities of its social network users and beyond, which enables it to target specific groups of customers.
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“We look in detail at whether this data gives Facebook an undue competitive advantage in particular in the online classifieds sector, where people buy and sell goods every day, and where Facebook also competes with companies from which it collects data.”
The commission says: An initial investigation has raised concerns that Facebook may be using data from competing classified ad services that advertise on its platform to compete with it.
The Commission and the UK Competition and Markets Authority (CMA) are now conducting an in-depth formal investigation to assess these concerns.
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Facebook’s never ending problems:
In addition to market concerns and classifieds, the UK’s CMA is also investigating the Facebook dating service on similar grounds.
A Facebook spokesperson said he believed the allegations were unfounded. He added that both services are part of highly competitive markets.
He added, “We are always working on developing new and better services to meet the growing demand from people who use Facebook. Market and dating services provide people with more choices and both products operate in a very competitive environment with many established companies. We continue to cooperate fully with the investigations to prove that they are baseless.
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The European Commission has been examining Facebook’s marketplace service for years. Reuters notes that European officials sent out surveys about the service in 2019. But Facebook has resisted the investigation, arguing that EU requests mean irrelevant but highly sensitive information must be handed over.
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The marketplace service was launched via Facebook in 2016, and allows people to buy and sell items from local residents.
It is now used by 800 million Facebook users in 70 countries. Competitors have complained that Facebook is giving itself an unfair advantage by being able to advertise the market for free to its two billion users.
It is noteworthy that this is the first time that the official investigation with the social network by the European Union.
The European bloc has previously launched similar anti-competition investigations against Apple, Google, Amazon and Microsoft.
The European Union earlier this year formally accused Apple of violating antitrust rules via App Store policies.
The commission said last November that Amazon misuses data it collects from overseas market sellers.
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