It’s been a tough week at Meta HQ, as the European Commission imposed another fine on the tech giant for linking Facebook Marketplace, its classifieds service, to Facebook and using non-public advertising data.
Authorities are demanding €797.72 million for Meta, essentially giving Marketplace an unfair advantage over competing digital storefronts. Marketplace was created in 2016 as a way for individuals to buy and sell items via social media, especially furniture.
The European Union says Meta violates antitrust and competition restrictions laws
The committee has two main problems. The first is that “all Facebook users automatically have access to the Facebook Marketplace and are regularly exposed to it whether they want to or not,” and competitors cannot reach the same level of exposure.
The second is that competitors must consent to Meta using their data if they want to advertise on Facebook or Instagram. This data could benefit Marketplace, and the Commission says its request is “unjustified, disproportionate and unnecessary for the provision of online display advertising services on the Meta Platforms.”
The UK Competition and Markets Authority has also questioned Meta’s data practices, arguing that they may give Meta an undue competitive advantage. However, the authority ended its investigation after Meta agreed to limit its use of advertising data and allow advertisers to opt out of the use of their data.
Margrethe Vestager, the outgoing European Commissioner for Competition, said such practices provide Meta with “advantages that other online classifieds service providers cannot match.”
“This is illegal under EU antitrust rules. Meta must now stop this behavior,” she said. press release.
SEE: Apple’s geo-blocking practices may violate EU rules
Meta’s ownership of Facebook and Instagram makes it dominant in the social media and digital advertising markets on social media. While this is not illegal in itself, it does make it responsible not to abuse its position by restricting competition in these two markets, in accordance with European law.
The Commission first opened proceedings regarding Meta’s potential anticompetitive conduct June 2021 It issued preliminary fees via A Statement of Objections for December 2022.
The fine was calculated by taking into account the duration and severity of the violation, as well as Meta and Marketplace sales volume. When this money is paid out, it will go towards the EU’s general budget, reducing member states’ contributions the following year and the burden on taxpayers.
Meta appeals fine, denies Marketplace and ad data claims
Meta immediately responded to the committee’s announcement, saying that it would do so Appeal the fine. Mark Zuckerberg’s company says the authority “ignores the fact that Facebook users can choose whether or not to engage with Marketplace” and that it does not use competitors’ data to benefit Marketplace, as it has “built-in systems and controls to ensure this.”
She added that the Commission “provides no evidence of competitive harm to competitors or any harm to consumers,” using eBay, Leboncoin and Marketplaats as examples of competitors that continue to achieve success. Regardless, Meta noted that EU competition law “does not preserve the established commercial positions of incumbent service providers in the face of innovation.”
Meta also pointed to September a report Former European Central Bank President Mario Draghi has called for comprehensive reform to boost competitiveness and innovation in the region, arguing that the fine runs counter to those goals. The tech giant cited this report again a few days ago after compromising to regulators regarding its advertising practices.
EU’s ongoing crackdown on Meta advertising practices
Vestager has long had Meta and competitors like Apple, Google and Amazon in its crosshairs. The name of the game is to protect the digital autonomy of EU citizens and hold tech giants accountable for their data collection and privacy practices.
A significant portion of Meta’s revenue comes directly from clicks and targeted engagement ads on Facebook and Instagram. Thus, losing a slice of user data as large as the population of the EU’s 27 countries could hurt its continued growth, so Meta has a financial interest in conceding to the EU’s demands. In the third quarter of this year 23.5% of advertising revenue Created by European users.
Meta is currently challenging the commission to list Marketplace and Messenger Core platform services Which must comply with DMA requirements, as provided by them “An important gateway for business users to reach end users,
A company spokesman said Edge Marketplace shouldn’t qualify because it’s a consumer-to-consumer service, and Meta doesn’t fall in the middle. Complying with the DMA means that Meta will have to follow rules regarding data sharing and interoperability, which could impact its competitiveness.
He was dead too He was fined €110 million by the Commission in 2017 For providing misleading information during its acquisition of WhatsApp three years ago. The company assured regulators that it could not automatically link user accounts between the two platforms but later introduced features to do so.
See: EU AI law: Europe’s new rules for AI
Over the years, the European Data Protection Commission has fined Meta several times for violating GDPR rules based on its targeted advertising practices. In addition to the DMA and GDPR, Meta must comply with the Digital Services Act, which is a set of rules designed to regulate how “Very large online platforms“Dealing with privacy, protecting its users, and working transparently.
But it’s not just advertising data that Meta and the EU are fighting over. In June, Meta has delayed training its large language models on public content shared on Facebook and Instagram in Europe after regulators suggested it may need to obtain approval from content owners. Meta AI, the frontier AI assistant, has not yet been released within the bloc due to… “Unexpected” regulations..
Representatives from Meta, along with Spotify, SAP, Ericsson, Klarna, and others, signed an open letter in September to Europe expressing concerns about “inconsistent regulatory decision-making.” The letter says interventions by European data protection authorities have created uncertainty about the data they can use to train their AI models.