The EU has fined Meta, Facebook’s parent company, $841 million for abusing its dominant position in “abusive” and anticompetitive ways related to the marketplace platform. This is the first time the EU has fined Meta for infringement of competition law, an important landmark as the bloc continues with strict scrutiny of players in Big Tech.
The European Commission has imposed the fine after going into an extended investigation on Meta’s online classified ads business, Marketplace. The Commission asserts that Meta had abused its dominant position in the space of social media by stifling competition and causing distortions in the market.
Meta had before come under the scanner of European regulators, while others, in the form of Google and Apple, had already begun paying exemplary fees in a comparable violation. However, this is the first time the EU has imposed an antitrust fine on Meta for breaching competition rules.
Case Against Meta’s Marketplace
Probe the probe into alleged antitrust abuses began in 2021 and was a spin-off of complaints filed regarding Meta’s integrating Marketplace with the broader social network on Facebook. According to regulators, such was done without Meta seeking consent from them, thereby forcing users into Meta’s advertising ecosystem on Facebook.
One of the concerns is that the firm relied on data associated with ads produced by alternative online classified ad services providers. Meta was said to have employed the data in the pursuit of an unfair competitive edge for Marketplace. By so doing, Meta further competed away from the line.
According to Margrethe Vestager, the executive vice-president of competition for the Commission, Meta’s actions provided it with “advantages that other online classified ads service providers could not match,” a violation of the EU antitrust laws.
“Meta must now stop this practice,” Vestager said in a statement issued after the fine was imposed. She further warned that such practices would not be tolerated in the competitive market of the EU.
Meta’s Reaction To The Penalty
Meta has, however countered that the sanction does not stand since no concrete “competitive harm” to rivals or consumers exists. According to the company, Facebook users are not forced to interact with Marketplace and can choose if they want to interact with the platform.
“The decision ignores the realities of the thriving European market for online classified listing services,” Meta said in its official response. That is to say, the other platforms continue to grow and succeed alongside the presence of Marketplace on Meta, such as eBay and Vinted.
In response to the fine, Meta indicated it was prepared to abide by the judgment and stop its activities that had been deemed harmful. However, it also added that it would seek a revocation of the ruling in court.
Challenges For Meta
This fine is one of the many challenges Meta is facing in the European Union. The firm is also being investigated about its child safety and election integrity on Facebook and Instagram. Meta has been fined several times for violating the EU’s strict data privacy rules. Meta was hit with a record $1.26 billion fine in 2023 over the handling of user data.
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