Meta Platforms is expected to face its first EU antitrust fine in the coming weeks for tying its classified advertisements service, Marketplace, with its Facebook social network, Reuters news report said.
This decision by the European Commission follows more than a year and a half after accusations were made against Meta Platforms for giving Marketplace, the classified digital advertisements service, an unfair advantage by bundling it with Facebook. Meta Platforms has generated revenue of $134 billion in 2023. Meta does not reveal its revenue from Facebook.
Facebook’s Marketplace is a feature on the social networking platform that allows users to buy and sell goods. It contributes to Facebook’s revenue through sales commissions. Facebook earns a percentage of the transaction fee for each sale made through the Marketplace.
The EU competition watchdog also accused Meta of abusing its market dominance by imposing unfair trading conditions on competing online classified ads services that advertise on Facebook or Instagram. The fine could be as much as $13.4 billion, or 10 percent of Meta’s 2023 global revenue, although EU sanctions typically do not reach the maximum cap.
The Commission is expected to issue its decision in September or October before EU antitrust chief Margrethe Vestager leaves office in November, though the timing could change.
Meta Platforms has reiterated its stance, claiming the allegations are unfounded. “We continue to work constructively with regulatory authorities to demonstrate that our product innovation is pro-consumer and pro-competitive,” said Meta spokesperson Matt Pollard.
Last year, Meta Platforms attempted to settle the EU investigation by offering to limit the use of competitors’ advertising data for Facebook Marketplace. This concession was rejected by the EU, though a similar offer was accepted by the UK competition regulator.
In a separate matter, the European Commission recently charged Meta with non-compliance with new tech regulations due to its newly introduced pay-or-consent advertising model launched in November.
Baburajan Kizhakedath