The European Commission announced it has imposed a fine of €797.72 million or $840.24 million on Meta Platforms for allegedly abusing its market position to benefit Facebook Marketplace, an online classified ads service.
According to the Commission, Meta breached EU antitrust rules by linking its classified ads service, Facebook Marketplace, with its social networking platform, Facebook. This practice, the Commission stated, imposed unfair conditions on other online classified ad services.
The size of the online classified ad platform market is expected to grow by $27.86 billion over a five-year period, achieving a CAGR of 11.53 percent from 2023 to 2028.
Meta Platforms, the # social media platform, has generated digital ad revenue of $9.358 billion from Europe alone during the third-quarter of 2024.
The penalty follows a lengthy investigation that began in June 2021, with EU regulators formally examining Meta’s business practices.
By December 2022, the Commission raised specific concerns about Meta’s alleged anti-competitive tactics, arguing that bundling Facebook with Marketplace limited competition and potentially disadvantaged other digital classified ad platforms.
All Facebook users are automatically exposed to Facebook Marketplace, providing Marketplace with a distribution advantage that competitors cannot easily replicate. This arrangement, the Commission argues, limits competition by preventing other online classifieds services from competing fairly.
Meta allegedly imposed conditions on advertisers using Facebook and Instagram that allow Meta to use ad data solely for the benefit of Facebook Marketplace, thereby disadvantaging competing classified ads services.
“Meta tied its online classified ads service Facebook Marketplace to its personal social network Facebook and imposed unfair trading conditions on other online classified ads service providers,” Margrethe Vestager, Executive Vice-President in charge of competition policy, said.
“Meta 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 behavior,” Margrethe Vestager said.
While Meta claims that users have the option not to engage with Marketplace, the Commission insists that Meta’s approach constitutes an illegal “tying” practice.
In response, Meta has expressed its intention to appeal the decision, though it plans to comply with the ruling in the interim. The company is working on a solution to address the issues highlighted by the Commission.
Under EU antitrust law, companies can be fined up to 10 percent of their global turnover for violations, reinforcing the European Union’s commitment to regulating fair competition among major tech corporations.
Baburajan Kizhakedath
