The European Commission on Thursday fined Meta nearly €800 million for breaching antitrust rules by giving Facebook users automatic access to Facebook Marketplace, benefiting the platform through “abusive practices”.
The €797.72 million ($840.24 million) penalty follows a prolonged investigation, which concluded that Meta had abused its dominant market position and engaged in anti-competitive conduct.
What the European Commission claimed
“The European Commission has fined Meta … for breaching EU antitrust rules by tying its online classified ads service Facebook Marketplace to its personal social network Facebook and by imposing unfair trading conditions on other online classified ads service providers,” the European Commission said.
The European Commission accused the American technology company of misusing its market dominance by enforcing unfavourable business conditions on competing online classified advertisement services advertising on its platforms.
Facebook introduced Marketplace in 2016, expanding across various European nations the following year. The EU’s ruling contends that Meta unlawfully forces Facebook Marketplace upon Facebook users. However, Meta disputes this, stating that users have the choice to engage with Marketplace, with many choosing not to.
According to the commission, Facebook Marketplace gained an unfair “substantial distribution advantage” over competitors due to its integration with Facebook.
“All Facebook users automatically have access and get regularly exposed to Facebook Marketplace whether they want it or not,” it said.
The commission also said that Meta established unfair conditions for competing classified ads services advertising on Facebook and Instagram.
This enabled Meta to “use ads-related data generated by other advertisers for the sole benefit of Facebook Marketplace”, it said.
What the company said
Meta has indicated its intention to appeal while simultaneously working on implementing a prompt solution that addresses the concerns raised. It contested the ruling, stating it disregarded “the realities of the thriving European market for online classified listing services”.
“Facebook users can choose whether or not to engage with Marketplace, and many don’t. The reality is that people use Facebook Marketplace because they want to, not because they have to,” the company stated.
Meta highlighted that whilst the Commission suggested Marketplace could potentially obstruct the growth of established online marketplaces in the EU, they failed to present evidence of actual competitor harm.
Meta denied using advertisers’ data for such purposes, stating they have implemented systems and controls to prevent this.
“It is disappointing that the Commission has chosen to take regulatory action against a free and innovative service built to meet consumer demand,” the company added.
This European Commission action follows its allegations from two years ago regarding Facebook Marketplace receiving undue advantages through its integration with Facebook’s main service.
The European Union initiated formal investigations into Facebook’s potentially anti-competitive behaviour in June 2021, followed by concerns in December 2022 about Meta connecting its dominant social network to its classified advertising services.
Meta reported approximately $135 billion (125 billion euros) in total revenue for the previous year.