Goalwhat was once Facebook matrix, hasn’t hit the ball for months. The company intended to reinvent itself and relaunch itself with the Metaverse, but said universe has crashed with a lackluster start, lack of enthusiasm among its own employees, stock market crashes, and the recent departure of John Carmack. Can things go worse for Meta? The answer to that question is yes if we see that the European Union, in its initial findings, has determined that the company has abused its dominant position to benefit Facebook Marketplace.
Delving into the details, The European Commission has confirmed that it is conducting an antitrust investigation into Meta for the way it links the social network Facebook and the Marketplace classifieds service.. The commission’s statement of objections points to “unfair trading conditions” related to how the company uses data collected from rivals’ classified ad services.
The European Commission’s announcement comes eighteen months after both the European Commission and the UK Competition and Markets Authority (CMA) announced separate but collaborative investigations to find out if Meta was abusing its position. dominant in the online ad market. The corporation led by Mark Zuckerberg would have set specific conditions to give itself an unfair advantage over the competition. The CMA already announced in August that it would continue its case against Meta and the European Commission now aims to follow the same line.
The Marketplace was launched in 2016 and allows any Facebook user to buy and sell almost anything, from clothes and books to smartphones and furniture. So far nothing that is strange at least in appearance, but the European Commission has determined that Meta could be breaching the antitrust regulations of the European Union because it would be maneuvering to “distort competition in the online classifieds markets” by linking its product of classified ads with its social network, therefore, if the findings are confirmed, it would be violating article 102 of the Treaty on the Functioning of the European Union (TFEU).
Margrethe Vestager, executive vice president in charge of competition policy at the European Commission, explained that Meta, with its social network Facebook, has “worldwide to billions of monthly users and millions of active advertisers. Our preliminary concern is that Meta links its dominant social network, Facebook, with its online classifieds services called Facebook Marketplace. This means that Facebook users have no choice but to have access to the Facebook Marketplace.. In addition, we are concerned that Meta has imposed unfair trading conditions, allowing it to use data from competing online classifieds services. If confirmed, Meta’s practices would be illegal under our competition rules”.
The scope of the European Commission’s investigation also covers the classified ad services of Meta’s rivals that advertise on the company’s digital properties, which also include Instagram as well as Facebook. Through this channel, the commission has determined, preliminarily, that the terms and conditions that it imposes on other advertisers are unjustified and disproportionate. To determine that, it’s looking at how Meta can use its competitors’ ad-related data to benefit Marketplace.
As we can see, Meta’s problems accumulate. If the violation of the antitrust legislation of the European Union is confirmed, the company will have to face a fine that will surely have an impact on another decrease in its value on the stock market.
