Meta Penalized for Anticompetitive Practices
The European Union has imposed a hefty fine of €798 million ($840 million) on Meta Platforms for violating EU antitrust rules. According to the European Commission, Meta abused its market dominance by linking its social networking platform, Facebook, with its online classified ads service, Facebook Marketplace.
“The European Commission has fined Meta for breaching EU antitrust rules by tying Facebook Marketplace to Facebook and imposing unfair trading conditions on other online classified ads service providers,” the EU’s executive arm stated.
Meta to Appeal Decision
Meta has announced its intent to appeal the ruling, arguing that the decision misrepresents how Facebook Marketplace operates. Despite this, the company confirmed it will comply with the order and work quickly to address the concerns raised by the Commission.
Allegations of Unfair Bundling Practices
The European Commission launched its investigation into Meta’s practices in June 2021, raising formal objections in December 2022. Regulators alleged that Meta leveraged Facebook’s dominance to provide Facebook Marketplace with an unfair advantage by bundling the two services.
The EU argued that this “illegal tie” forced Facebook users to engage with Facebook Marketplace, hindering competition from other classified ad platforms. Meta, however, countered that Marketplace is optional for Facebook users, many of whom choose not to use it.
Lack of Evidence on Market Harm, Says Meta
Meta criticized the EU’s findings, stating that the Commission could not substantiate claims that Facebook Marketplace harmed competitors. The company maintains that Marketplace had no measurable impact on the growth of large incumbent marketplaces in Europe.
Steep Penalties for Antitrust Violations
Under EU regulations, companies found guilty of antitrust violations face fines of up to 10% of their global revenue. The $840 million penalty underscores the EU’s continued scrutiny of major tech firms for anti-competitive practices.
Background on Facebook Marketplace
Launched in 2016, Facebook Marketplace serves as a platform for users to buy and sell items locally. The service expanded to European markets a year later, becoming a key component of Meta’s business model.
The European Commission’s decision marks a significant development in the ongoing regulatory battles between the EU and major U.S. tech companies, signaling the bloc’s intent to enforce fair competition in digital markets.