Meta Platforms May Face Major Fines Over Classified Ads Allegations

Meta Platforms, the parent company of Facebook, is under scrutiny from European regulators for allegedly attempting to monopolize the classified advertising market, according to the Financial Times. Sources familiar with the situation indicate that a decision could be reached as soon as next month, marking a significant conclusion to one of the final investigations led by the EU’s outgoing competition chief, Margrethe Vestager.

The European Commission is expected to assert that Meta links its free Marketplace service to Facebook in a bid to weaken competition. This investigation, which began in 2019 following complaints from rivals, focuses on claims that Facebook has been abusing its dominant position by offering free services while leveraging data collected from businesses on the platform for profit.

In December 2022, initial findings from the European Commission suggested that Meta’s practices were distorting competition within the online classified ads sector. The Commission highlighted concerns that Meta was utilizing data gathered from businesses at no cost to enhance its advertising services to users.

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While Meta has refrained from providing detailed comments, the company has previously described the allegations as unfounded, asserting that its innovations are both consumer-friendly and competitive. If found guilty, Meta could face penalties amounting to 10% of its global annual revenue, which reached nearly $135 billion in 2023. However, fines from regulators often tend to be significantly lower than the maximum allowable.

As the EU prepares for a transition in leadership, with Ursula von der Leyen set to appoint Spain’s Teresa Ribera as the new antitrust chief, Vestager is eager to finalize this case before her departure in early November. Throughout her decade-long tenure, Vestager has made headlines for her aggressive enforcement against major tech firms, including Apple, Google, and Microsoft.

As the situation develops, Meta has indicated that it views Facebook Marketplace as part of a highly competitive landscape and maintains that it does not misuse data from rivals to its advantage.

Source: The Financial Times