On December 19th the European Commission came to a preliminary view that Meta was in breach of EU antitrust rules by tying its online classified ads service, Facebook Marketplace, to Facebook, its social network. This follows the opening of an investigation into possible anticompetitive conduct in June 2021.
The Commission’s Statement of Objections (see here) preliminarily finds that Meta abused its dominant positions in the following two ways:
- First, Meta ties its online classified ads service, Facebook Marketplace, with its dominant personal social network Facebook. This means that users of Facebook automatically have access to Facebook Marketplace, whether they want it or not. The Commission is concerned that competitors of Facebook Marketplace may be foreclosed as the tie gives Facebook Marketplace a substantial distribution advantage that competitors cannot match.
- Second, Meta unilaterally imposes unfair trading conditions on competing online classified ads services which advertise on Facebook or Instagram. The Commission is concerned that the terms and conditions, which authorise Meta to use ads-related data derived from competitors for the benefit of Facebook Marketplace, are unjustified, disproportionate and not necessary for the provision of online display advertising services on Meta’s platforms. Such conditions impose a burden on competitors and only benefit Facebook Marketplace.
Meta will have a chance to respond to the Statement of Objections and organise a defence. The company’s initial public statement asserted that “the claims made by the European Commission are without foundation”. However, with the prospect of a 10% fine and the Commission’s arguments solidly backed by precedent developed against Microsoft and Google, we expect the company to shift its position.
MOW will be following the developments of this case with interest.