UK and EU regulators are investigating Facebook over whether it is abusing its dominance in digital advertising.
It marks the first time the regulators have coordinated on a major inquiry since Brexit, and strikes at the core of Facebook’s revenues, which rely heavily on selling advertising on its platform.
The investigation will consider whether the social media giant has unfairly used its vast trove of data to compete with individuals and businesses that post adverts on Facebook Marketplace – where people buy and sell goods daily – or the Facebook Dating platform, which launched in Europe last year.
The Competition and Markets Authority (CMA) said it would work “closely” with the European Commission to determine whether Facebook might be stifling competition by “abusing a dominant position in the social media or digital advertising markets”.
Facebook, which could be fined by regulators depending on their findings, has said that the investigations were launched “without merit”.
The social media platform, which was founded in 2004 by its now-billionaire chief executive, Mark Zuckerberg, is used by nearly 3 billion people a month, and about 7m firms advertise on the platform in total.
The European Commission said Facebook was able to collect “vast troves” of data through its social network and beyond, thanks to single sign-on features that allow users to log into other websites using their Facebook account. That data enables it to target specific customer groups that could make it harder for rivals to compete, the regulator added.
Meanwhile, companies that advertise on Facebook are also giving up valuable data, which the regulator said could be used by Facebook to “outcompete” those same firms.
“In today’s digital economy, data should not be used in ways that distort competition,” the EU’s competition commissioner, Margrethe Vestager, said.
It is the CMA’s third investigation into a potential breach of competition rules online, after the watchdog opened investigations into Google’s plans to remove third-party cookies and other functionalities from its Chrome browser earlier this year. The UK regulator is also looking at whether Apple has set unfair terms and conditions for developers trying to access its App Store.
Responding to the coordinated investigations, Facebook said:“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.
“We will continue to cooperate fully with the investigations to demonstrate that they are without merit.”
Digital media | The Guardian June 4, 2021 at 06:21PM Kalyeena Makortoff
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