Facebook hit with new antitrust probes in the U.K. and E.U.

June 7, 2021: -On Friday, Regulators in the U.K. and the E.U. launched formal competition investigations into Facebook at the same time.

The U.K.’s Competition and Markets Authority investigates whether it will use a dominant position in the social media or digital advertising markets in its collection and use of ad data.

The CMA said it would look into if it has unfairly used the data gained from its advertising and single sign-on option, which is Facebook Login, to get its buying and selling platform, Facebook Marketplace, and its online dating service Facebook Dating.

Andrea Coscelli, chief executive of the CMA, said in a statement, “We intend to thoroughly investigate the use of data to assess of Facebook whether the business practices that give it an unfair advantage in the online dating and classified ad sectors.”

“Any such advantage can be harder for competing firms to succeed, including new and smaller businesses, and may reduce customer choice,” he added.

Meanwhile, The European Commission, the executive arm of the E.U., said it was opening a formal antitrust investigation to assess whether it breaches its rules “by using advertising data gathered in particular from advertisers to compete with them in markets where it is active like classified ads.”

The investigation will also seek to determine if the link between the leading Facebook social network and Facebook Marketplace breaches E.U. competition rules.

Margrethe Vestager, the European Commission’s executive vice president, said in a statement, “Facebook is used by almost 3 billion people every month, and almost a total of 7 million firms advertise on Facebook. It collects vast troves of data on the activities of users of its social network and beyond that enables it to target specific customer groups.”

“We will look in detail at if this data provides Facebook an undue competitive advantage in particular on the online classified ads sector, where people buy and sell goods every day, and where company also competes with companies from which it is collecting data. In today’s digital economy, data should not be used in ways that distort competition,” Vestager added.

A spokesperson said, “We are always developing new and better services to meet the evolving demand from Facebook users. Marketplace and Dating offer people more choices, and both products operate in a competitive environment with large incumbents. We will keep going to cooperate fully with the investigations to demonstrate that they are without merit.”

The share price of the company was down a little over 1% in the premarket to $322 a share on the back of the announcements.