The EU Slaps Meta with $840 Million Fine for Unfair Practices on Facebook Marketplace
Meta responded by saying it would appeal the decision but would ‘work quickly and constructively to launch a solution’ to the issues raised by the EU.
Meta has been fined 797 million euros ($840 million) by the European Commission for “abusive practices” which unfairly benefited Facebook Marketplace.
Facebook launched Marketplace in 2016.
The fine was issued two years after the commission accused Meta of giving its classified ads service Facebook Marketplace an unfair advantage by bundling the two services together.
The European Union opened formal proceedings into Facebook’s allegedly anticompetitive conduct in June 2021, and in December 2022, raised concerns about the ties between Facebook and its online classified ad services.
The commission ruled Meta had imposed Facebook Marketplace on people, using Facebook as an illegal “tie.”
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Meta was also ruled to have imposed, “unfair trading conditions on other online classified ads service providers who advertise on Meta’s platforms, in particular on its very popular social networks Facebook and Instagram.”
It said this allowed Meta, “to use ads-related data generated by other advertisers for the sole benefit of Facebook Marketplace.”
The European Union has the power to fine companies up to 10 percent of their global turnover for breaching antitrust rules.
The commission also ordered Meta “to bring the conduct effectively to an end, and to refrain from repeating the infringement or from adopting practices with an equivalent object or effect in the future.”
Meta Says Commission Ignores Reality
The California-based company, in a statement on its website, says the commission’s decision “ignores the realities of the thriving European market for online classified listing services.”
Meta said, “From the very beginning, people have bought and sold items on Facebook. When Facebook Marketplace first launched globally in 2016, people in the European Economic Area had organically created more than 400,000 groups focused on buying, selling, or promoting goods on Facebook.”
The company said Facebook Marketplace was set up to create a “more convenient and easy-to-use way for people to discover, buy, and sell items at no charge.”
The company said it was providing customers in Europe “with a new choice beyond the large incumbent online marketplaces that have dominated the landscape for a long time.”
Meta pointed out that the German competition regulator, the Bundeskartellamt, had welcomed the “effective competition … from newcomers such as … Facebook Marketplace.”
Meta refuted the European Commission’s claim that it “imposes Facebook Marketplace on people who use Facebook in an illegal ’tie.’”
“The reality is that people use Facebook Marketplace because they want to, not because they have to,” the company said.
Meta said rival online platforms such as eBay, Leboncoin in France, Marktplaats in the Netherlands, Subito in Italy, Blocket in Sweden, and Finn.no in Norway were “formidable competitors” and had “continued to report considerable commercial success, including strong financial results and growth, since Facebook Marketplace launched.”
The company noted that new marketplace companies, such as Vinted, had also emerged and were thriving in Europe.
Meta said, “The real problem is that this case entirely distorts competition law. EU competition law is intended to protect the competitive process and consumers, not to preserve the established business positions of incumbent providers in the face of innovation.”
They said, “We aim to make announcements shortly to reassure our European users that Facebook Marketplace is here to stay.”
Reuters contributed to this report.
