The EU and UK are jointly investigating Facebook.
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You wait ages for one antitrust investigation to come along, and then two show up at once. At least, that’s what happened to Facebook on Friday. The European Commission and the UK’s Competition and Markets Authority both announced they’re launching antitrust probes into the social media company’s potential misuse of ad data.
Both regulators are concerned that Facebook is using data it gathers from advertisers to compete directly with them, thereby abusing its dominant market position and putting competitors at a disadvantage. The EU is also specifically going to look into whether Facebook ties its social network to its online classified ads service, while the UK is going to look into Facebook Dating.
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“Facebook collects vast troves of data on the activities of users of its social network and beyond, enabling it to target specific customer groups,” said European Competition Commissioner Margrethe Vestager in a statement. “We will look in detail at whether this data gives Facebook an undue competitive advantage in particular on the online classified ads sector, where people buy and sell goods every day, and where Facebook also competes with companies from which it collects data.”
A spokesperson for Facebook said the company will cooperate fully with the investigations in order to “demonstrate that they are without merit.” She added: “We are always developing new and better services to meet evolving demand from people who use Facebook. Marketplace and Dating offer people more choices and both products operate in a highly competitive environment with many large incumbents.”
EU investigations into Big Tech are nothing new, but this is the first time a probe into Facebook has escalated beyond the preliminary stages. The Commission has shown in the past that it’s not afraid to take action against Silicon Valley tech giants, having issued multiple billion-dollar fines against Google for abusing its own dominant market position.
Until it left the EU in January last year, the UK didn’t conduct its own concurrent antitrust investigations with the European Commission. But now the two regulators intend to work closely together, even though their investigations are independent of one another. This means that Facebook could receive double the penalties if it’s fallen foul of both UK and EU competition law.
“We intend to thoroughly investigate Facebook’s use of data to assess whether its business practices are giving it an unfair advantage in the online dating and classified ad sectors,” said Andrea Coscelli, chief executive of the CMA, in a statement. “Any such advantage can make it harder for competing firms to succeed, including new and smaller businesses, and may reduce customer choice.”
Back in March, the CMA also opened an investigation into Apple over potential App Store abuses. In April, it established a new Digital Markets Unit, which is looking into how codes of conduct could work in practice to govern the relationship between digital platforms and smaller businesses.