The European Commission said it will investigate whether Facebook misuses a lot of data collected from advertisers to compete against them in classified ads.
Facebook Inc. faces its first in-depth investigation by European regulators, the latest in a series of efforts to crack down on the dominance of the high-tech market across the continent.
The European Commission said it will investigate whether Facebook misuses a lot of data collected from advertisers to compete against them in classified ads. It will also check if the company is unfairly linking its small Marketplace ad service to the social network.
At the same time, the UK said it was opening probes to Marketplace and Facebook Dating services hours after the German antitrust dog announced a case targeting the Google News Showcase product.
The cases open another front for the big tech companies in the world in which they have to fight, as regulators investigate their market power during a pandemic in which online commerce and advertising have become much more important for consumers. people working from home. Germany is already investigating Facebook and Amazon.com Inc. while France examines the advertising practices of Google and Apple Inc.
Opening a formal inquiry means that regulators can begin to generate strong evidence of antitrust violations, a process that can lead to a charge sheet or a statement of objections, which can end in heavy fines or with the order to change the way how a company works.
Facebook divisions rose less than 1% to $ 328.1 at 9:47 a.m. in New York on Friday. Shares have risen around 20.2% this year.
Friday’s move by the EU is the first time it has increased the case for Facebook’s behavior beyond the preliminary stages. Follow other high-profile cases directed at Google, Apple Inc. and Amazon.com Inc. The EU previously fined Facebook for failing to provide correct information in reviewing the merger of the WhatsApp acquisition.
“Facebook collects big data on the activities of users of its social network and beyond,” said Margrethe Vestager, EU competition chief. EU regulators “will examine in detail whether this data provides Facebook with an undue competitive advantage, especially in the online classifieds industry, where people buy and sell products every day,” he said.
Online commerce has played an increasingly important role in Facebook’s business during the pandemic, as more people buy products online.
“Trade ads continue to work very well and generate a significant amount of our overall business,” Facebook CEO Mark Zuckerberg said in a earnings call in April. He said more than a billion people now visit Facebook Marketplace every month.
Facebook “will continue to cooperate fully with investigations to prove they have no merit,” the company said in an emailed statement. “We are always developing new and better services to meet the evolving demand of people who use Facebook.
The UK antitrust regulator also opened its own probe on Facebook data, looking at both the Marketplace and the dating service the company launched in Europe last year.
The Competition and Markets Authority said it planned to investigate whether Facebook was abusing its dominant position by collecting data from the services, including its single sign-on option.
The CMA, increasingly focused on technology, is conducting independent research, but said it will cooperate with EU research. The CMA said its initial investigation, including gathering information, will run until February.
Germany’s Federal Cartel Office said Friday it is looking at the Google News Showcase to see if its terms offer “unreasonable terms” to publishers. The move is the latest in a series of attacks on Big Tech by German antitrust chief Andreas Mundt.
EU research reflects previous research on Amazon in analyzing how a so-called digital platform can use the data it collects from companies that use its service to compete against them. The EU commission has been investigating Facebook since 2019. Facebook tried to curb the investigation with lawsuits last year to limit the information officials could obtain.