Polls will look at whether Facebook’s use of advertiser data gives it an unfair advantage in the online ad market: Copyright AFP Mike FIALA, Robyn BECK, Richard A. Brooks, Mike CLARKE, Dale DE LA REY, Anthony WALLACE, Philip FONG, Isaac LAWRENCE, Peter PARKS
The European Union and Britain on Friday launched parallel competition tests over whether Facebook uses advertiser data to unfairly dominate the online ad market.
The American social media giant sells classified ads on its Marketplace service, but also collects commercial advertising data that can give it an unfair advantage, a charge the firm declared “no merit.”
Researchers will also investigate whether a single Facebook user’s login allows them to unfairly use the data collected through their social media, dating apps, and advertising platforms.
Cases opened by the European Commission and the UK Competition and Markets Authority (CMA) are separate, but regulators are working closely.
“Facebook collects big data on the activities of users of its social network and beyond,” said EU Vice President and Head of Competition Margrethe Vestager.
“We’ll see in detail if this data gives Facebook an undue competitive advantage, especially in the online classifieds industry, where people buy and sell products every day, and where Facebook also competes with companies from which it collects data,” he said. . .
“In today’s digital economy, data should not be used in a way that distorts competition.”
A Facebook spokesman responded in an email: “We will continue to cooperate fully with the investigations to prove that they have no merit.
“We are always developing new and better services to meet the evolving demand of people who use Facebook. ‘Marketplace’ and ‘Dating’ offer people more options and both products operate in a highly competitive environment with many headlines big “.
– Market announcements –
The formal investigation follows a preliminary investigation focused on Facebook’s Marketplace classified ads service, available to most of its three billion users.
Companies that advertise on the Marketplace must provide data to Facebook, according to the European Commission, which worries that the Internet giant could distort competition.
“Facebook could, for example, receive accurate information about users’ preferences from the advertising activities of its competitors and use that data to tailor Facebook Marketplace, ”he said.
The EU executive is also concerned about how Marketplace integrates with Facebook’s main social networking platform: “a way to link that gives you an edge in reaching customers and excludes online classified ad services competitors “.
There is no deadline to close the probe, and the commission said its duration depended on factors such as the complexity of the case.
– Internet Intercoms –
The European Commission said in a statement that the former CMA of Britain, a member of the EU, also opened on Friday its own investigation into how Facebook uses the data.
Britain has left the EU and now manages its own competition regime, but both regulators said they would work closely together to investigate Facebook.
Andrea Coscelli, executive director of the CMA, which created a “Digital Markets Unit” in April, said they would evaluate whether Facebook’s business practices give an unfair advantage to the online dating and classified ads sectors.
“Any of these advantages can hinder the success of competing companies, including new and small businesses, and can reduce customer choice.”
Last month, Brussels launched another probe on Facebook, related to the purchase of an American company Kustomer, which specializes in helping companies interact with customers online.
Vestager and the European Commission have often clashed with American digital giants in the past and have formally accused Apple of unfairly expressing rivals in its app store.
The EU is currently preparing an ambitious law, known as the Digital Markets Act, which will establish special rules for so-called “gatekeepers,” the American platforms that dominate the consumer Internet.