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Staff Writer
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Facebook’s parent company, Meta, has been hit with a hefty N1.4 trillion (€798 million) fine by the European Commission for what they call “abusive practices” involving its Marketplace online classified ads business, AP is reporting.
According to the commission, Meta had hoodwinked its competition by integrating its online classified ad business into its social network. This automatically exposes Facebook users to Marketplace “whether they want it or not” while shutting out competitors.
The commission said it was also concerned that Meta was imposing unfair trading conditions with terms of service that authorized the company to use ad-related data — generated from competing classified ad platforms that advertise on Facebook or Instagram — to benefit Marketplace.
The commission’s executive vice president in charge of competition policy, Margrethe Vestager, said Meta’s practices gave it advantages that other online classified ads service providers could not match.
“It did so to benefit its own service Facebook Marketplace, thereby giving it advantages that other online classified ads service providers could not match. This is illegal under EU antitrust rules. Meta must now stop this behaviour,” she said.
Facebook Marketplace
This is the first time the EU’s top antitrust watchdog would be hitting the company with a fine and it is coming on the heels of a long-running investigation that has lasted more than three years. Meta’s big tech rivals like Google and Apple have already been hit with billions of euros in fines for various antitrust breaches.
On its part, Meta did not take long to respond to the penalties imposed upon it by the EU. In a statement, the Facebook parent company said the EU’s decision fails to prove any “competitive harm” to rivals or consumers. It also claims that the judgement “ignores the realities of the thriving European market for online classified listing services.”
“This decision ignores the market realities, and will only serve to protect incumbent marketplaces from competition,” the company said.
Met also said the Commission ignores the fact that Facebook users can choose to engage with Marketplace or not and that many actually do not. It noted that online marketplaces, including global sites like eBay, Europe-wide platforms like Vinted, and national services are continuing to grow in spite of the perceived anti-competitive practices by Meta.
Nonetheless, the company said it would comply with the Commission’s order to end the offending conduct and not repeat it. It, however, vowed to appeal the decision.
While this is the first time Meta is facing a fine from the EU over competition rules, it had been penalised over other infractions. In 2017, it was ordered to pay €110 million for not handing over correct information when it purchased WhatsApp.
Similarly, the Irish Data Protection Commissioner fined the Facebook parent company more than €1 billion for mishandling people’s data when transferring it between Europe and the United States.
In 2021, it was ordered to pay £50 million when the UK’s Competition and Markets Authority (CMA) indicted the company of deliberately breaking rules over its attempt to acquire Gif-maker Giphy. The UK authorities would eventually demand that Meta sold the company altogether.
Meta’s woes were not limited to Europe as just last week. South Korea imposed a fine of $15.67 million (21.62 billion won) on the company following unauthorized collection of users’ sensitive information. The Asian country’s watchdog, Seoul Data Protection Agency, claimed that Meta gave the data to advertisers without a legal basis.
According to the Personal Information Protection Commission, Meta gathered information from more than 980,000 South Korean Facebook users while failing to seek their consent. data relating to religion, political views, and sexuality were gathered from users’ profiles.
The agency also affirmed that the tech giant provided the information to about 4,000 advertisers.
See also: Facebook’s owner, Meta fined $15.6m in South Korea for user privacy breach
According to the commission, Meta had hoodwinked its competition by integrating its online classified ad business into its social network. This automatically exposes Facebook users to Marketplace “whether they want it or not” while shutting out competitors.
The commission said it was also concerned that Meta was imposing unfair trading conditions with terms of service that authorized the company to use ad-related data — generated from competing classified ad platforms that advertise on Facebook or Instagram — to benefit Marketplace.
The commission’s executive vice president in charge of competition policy, Margrethe Vestager, said Meta’s practices gave it advantages that other online classified ads service providers could not match.
“It did so to benefit its own service Facebook Marketplace, thereby giving it advantages that other online classified ads service providers could not match. This is illegal under EU antitrust rules. Meta must now stop this behaviour,” she said.
Facebook Marketplace
This is the first time the EU’s top antitrust watchdog would be hitting the company with a fine and it is coming on the heels of a long-running investigation that has lasted more than three years. Meta’s big tech rivals like Google and Apple have already been hit with billions of euros in fines for various antitrust breaches.
Meta to appeal EU’s judgment
On its part, Meta did not take long to respond to the penalties imposed upon it by the EU. In a statement, the Facebook parent company said the EU’s decision fails to prove any “competitive harm” to rivals or consumers. It also claims that the judgement “ignores the realities of the thriving European market for online classified listing services.”
“This decision ignores the market realities, and will only serve to protect incumbent marketplaces from competition,” the company said.
Met also said the Commission ignores the fact that Facebook users can choose to engage with Marketplace or not and that many actually do not. It noted that online marketplaces, including global sites like eBay, Europe-wide platforms like Vinted, and national services are continuing to grow in spite of the perceived anti-competitive practices by Meta.
Nonetheless, the company said it would comply with the Commission’s order to end the offending conduct and not repeat it. It, however, vowed to appeal the decision.
While this is the first time Meta is facing a fine from the EU over competition rules, it had been penalised over other infractions. In 2017, it was ordered to pay €110 million for not handing over correct information when it purchased WhatsApp.
Similarly, the Irish Data Protection Commissioner fined the Facebook parent company more than €1 billion for mishandling people’s data when transferring it between Europe and the United States.
In 2021, it was ordered to pay £50 million when the UK’s Competition and Markets Authority (CMA) indicted the company of deliberately breaking rules over its attempt to acquire Gif-maker Giphy. The UK authorities would eventually demand that Meta sold the company altogether.
Meta’s woes were not limited to Europe as just last week. South Korea imposed a fine of $15.67 million (21.62 billion won) on the company following unauthorized collection of users’ sensitive information. The Asian country’s watchdog, Seoul Data Protection Agency, claimed that Meta gave the data to advertisers without a legal basis.
According to the Personal Information Protection Commission, Meta gathered information from more than 980,000 South Korean Facebook users while failing to seek their consent. data relating to religion, political views, and sexuality were gathered from users’ profiles.
The agency also affirmed that the tech giant provided the information to about 4,000 advertisers.
See also: Facebook’s owner, Meta fined $15.6m in South Korea for user privacy breach