UK and EU investigate Facebook over unfair use of data in digital advertising

Guardian Technology 04 Jun 2021 03:15

UK and EU regulators are investigating Facebook over whether it is abusing its dominance in digital advertising.

It marks the first time the regulators have coordinated on a major inquiry since Brexit, and strikes at the core of Facebook’s revenues, which rely heavily on selling advertising on its platform.

The investigation will consider whether the social media giant has unfairly used its vast trove of data to help Facebook Marketplace – a classified ad platform where individuals and businesses buy and sell goods daily – beat out the competition. Britains’s Competition and Markets Authority (CMA) will also examine the competition implications of the Facebook Dating platform, which launched in Europe last year.

The CMA said it would work “closely” with the European Commission to determine whether Facebook might be stifling competition by “abusing a dominant position in the social media or digital advertising markets”.

Facebook, which could be fined by regulators depending on their findings, has said the investigations were launched “without merit”.

The social media platform, which was founded in 2004 by its now-billionaire chief executive, Mark Zuckerberg, is used by nearly 3 billion people a month, and about 7m firms advertise on the platform in total.

Meanwhile, companies that advertise on Facebook are also giving up valuable data, which the regulator said could be used by Facebook to “outcompete” those same firms.

Marketplace’s rivals have complained to the EU that Facebook had a huge advantage in breaking into the classified ads market by being able to advertise the service for free to its 2 billion users.

Competing services such as Tinder and OKCupid are much larger, but they also have to pay to acquire users through Facebook Ads, while Facebook Dating gets the same service for free.

Meanwhile the European Commission has already fined Google more than €8bn on Google and is also investigating Amazon and Apple.

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FacebookCMABritainss Competition and Markets AuthorityEUEuropean Commission
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