EU Commission starts investigation against Facebook - suspected distortion of competition

It is not the first US Internet company that EU Competition Commissioner Margrethe Vestager has tackled.

Now she's taking a close look at the practices on Facebook.

Brussels - The EU Commission is starting a formal investigation against Facebook on suspicion of competition violations in the classified advertising service “Facebook Marketplace”.

This was announced by the EU Competition Commissioner Margrethe Vestager on Friday in Brussels.

EU Commission starts investigations against Facebook - anti-competitive behavior

Via the marketplace, users of the social network can privately buy and sell goods from one another. According to its own information, the EU Commission wants to clarify whether Facebook is exploiting its position in other markets for this service in an anti-competitive manner. If competing companies advertise their services on Facebook, Facebook could gain possession of economically valuable data and then use it against competitors, is the suspicion.

"After completing its preliminary investigation, the Commission cannot rule out the possibility that Facebook is distorting competition in the field of online classified advertising services," said the Commission.

For example, Facebook could derive precise information about user preferences from the advertising activities of its competitors.

This information could then be used to optimize Facebook Marketplace.

Facebook in the EU's sights: There is an allegation of distortion of competition

"Facebook is used by nearly three billion people every month and has a total of nearly seven million advertisers," said Verstager.

"The company collects huge amounts of data about the activities of users of its social network and other services and is therefore able to target specific customer groups."

The Commission will investigate in detail whether Facebook has an unjustified competitive advantage thanks to this data.

"We have to ensure that data is not used to distort competition in today's digital economy," stressed the Commission Vice-President.

Facebook Marketplace under the microscope: Great Britain is also starting investigations

The examination should also look at whether the embedding of Facebook Marketplace in the social network represents a "coupling" with which Facebook could hinder or exclude competing online classified advertising services.

This could be a violation of rules to defend against anti-competitive agreements between companies, as it was further said.

The procedure will be open-ended.

The British competition and market supervisory authority CMA (Competition and Markets Authority) also launched an investigation into the use of data by Facebook on Friday. The commission continued to try to work together.

(dpa)