Facebook’s Marketplace Facing EU Antitrust Scrutiny

The European Union (EU) is targeting Facebook’s Marketplace as the next leg in its antitrust investigation, according to a Monday (April 6) report in the Financial Times (FT).

In an effort to see if Facebook has an unfair advantage in the classified advertising space, investigators are asking the social media giant’s competitors to fill out a 14-page survey. The questions are focused on Facebook’s impact on rival classified ads businesses, like the German media group Axel Springer and Norway’s Schibsted. Facebook Marketplace is a free service for its 2 billion users.

Facebook introduced the Marketplace in 2016 to enable Facebook users to buy and sell all kinds of merchandise, even furniture and cars. This latest questionnaire is just one of several that EU investigators have distributed to Facebook competitors.

“Marketplace is growing nicely. It’s now used by hundreds of millions of people every month. We also rolled out ads in Marketplace, which are available in 94 markets, which means advertisers can extend their News Feed ads to Marketplace. We’re seeing a lot of interest, especially with retail and auto advertisers. It’s very early, but we’re seeing good results,” Sheryl Sandberg, chief operating officer, said on Facebook’s January earnings call.

The probe is still in the works despite the coronavirus pandemic, although there have been requests for a delay. Sources told FT that the EU was “hoping to charge Facebook formally in the summer.” The EU is also probing Facebook’s Libra cryptocurrency due to antitrust concerns.

Rivals have accused Facebook of using its position to offer free services while gathering data.

“The EU is investigating the potential abuse of Facebook’s dominant position by tying Marketplace into the social network and the advantages that might give them,” said a person with direct knowledge of the probe.

A Facebook spokesperson said: “Compliance with competition rules and other legal requirements is a key consideration for Facebook as we develop our services and products. We stand ready to answer any questions the European Commission may have.”

The coronavirus has ended up a boon for social media giant Facebook, which saw a 50 percent spike in usage as the virus ate its way through the country’s health and economy. Ad revenue, however, didn’t grow along with more users.