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The EU and the UK have both opened antitrust investigations looking into whether the way Facebook handles user and advertiser data gives it an unfair advantage in the classified ads space.
The European Commission announced its probe on Friday, which will focus on Facebook Marketplace — a platform which allows people to buy and sell items on Facebook.
“Facebook collects vast troves of data on the activities of users of its social network and beyond, enabling it to target specific customer groups,” said European Commissioner for Competition Margrethe Vestager in a statement. “We will look in detail at whether this data gives Facebook an undue competitive advantage in particular on the online classified ads sector, where people buy and sell goods every day, and where Facebook also competes with companies from which it collects data,”
In its press release the European Commission said companies which advertise their services on Facebook provide the platform with valuable commercial data. “Facebook might then use this data in order to compete against the companies which provided it,” the Commission said.
The Commission said that following a preliminary investigation it had concerns that Facebook might make use of data from competing marketplace services that advertise on the social network in order to “help Facebook Marketplace outcompete them.”
The UK’s competition watchdog the Competition and Markets Authority (CMA) also announced its probe on Friday. This investigation will look at both Facebook Marketplace and its dating service Facebook Dating, which launched last year.
“We intend to thoroughly investigate Facebook’s use of data to assess whether its business practices are giving it an unfair advantage in the online dating and classified ad sectors,” CMA Chief Executive Andrea Coscelli said in a statement.
The CMA said it will be “working closely” with the European Commission in its investigation.
“We are always developing new and better services to meet evolving demand from people who use Facebook,” a Facebook spokesperson told Insider.
“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,” the spokesperson added.
Facebook is already under intense antitrust scrutiny in the US. The FTC and 48 attorneys general filed two separate lawsuits against the company in December 2020 trying to force it to spin off its subsidiaries Instagram and WhatsApp. Facebook motioned to have the lawsuits dismissed in March.
The European Commission has also launched multiple investigations into Big Tech companies — most recently Apple — and has levied massive multi-billion-dollar fines in the past on companies deemed to be in violation of European competition law.