EC Sends Statement of Objections to Meta

The European Commission has informed Meta of its preliminary view that the company breached EU antitrust rules by distorting competition in the markets for online classified ads. The EC takes issue with Meta tying its online classified ads service, Facebook Marketplace, to its personal social network, Facebook. The EC is also concerned that Meta is imposing unfair trading conditions on Facebook Marketplace's competitors for its own benefit.

The Commission preliminary finds that Meta is dominant in the market for personal social networks, which is across Europe, as well as the national markets for online display advertising on social media. The Commission preliminarily finds that Meta abused its dominant positions in the following two ways.

First, Meta ties its online classified ads service Facebook Marketplace with its dominant personal social network Facebook. This means that users of Facebook automatically have access to Facebook Marketplace, whether they want it or not. The Commission is concerned that competitors of Facebook Marketplace may be foreclosed as the tie gives Facebook Marketplace a substantial distribution advantage that competitors cannot match.

Second, Meta unilaterally imposes unfair trading conditions on competing for online classified ads services that advertise on Facebook or Instagram. The Commission is concerned that the terms and conditions, which authorize Meta to use ads-related data derived from competitors for the benefit of Facebook Marketplace, are unjustified, disproportionate, and not necessary for the provision of online display advertising services on Meta's platforms. Such conditions impose a burden on competitors and only benefit Facebook Marketplace.

If confirmed, these practices would infringe Article 102 of the Treaty on the Functioning of the European Union (‘TFEU') which prohibits the abuse of a dominant market position. Article 102 of the TFEU prohibits the abuse of a dominant position. The implementation of these provisions is defined in the Antitrust Regulation, which can also be applied by the national competition authorities. If the Commission concludes, after the company has exercised its rights of defense, that there is sufficient evidence of an infringement, it can adopt a decision prohibiting the conduct and imposing a fine of up to 10% of the company's annual worldwide turnover.