Facebook is confronting two separate antitrust investigations by European regulators that will probe whether the social network’s use of data gives it an unfair advantage in online advertising.
The investigations could eventually result in hefty fines, and increase pressure on Facebook to make changes to its business model.
In a statement Friday, the European Commission said it is assessing whether Facebook breached EU competition rules by using data gathered from advertisers on its platform to compete against them.
European Competition Commissioner Margrethe Vestager, who has launched multiple investigations into US tech companies, said in a statement that data collected via social networks “should not be used in ways that distort competition.”
“We will look in detail at whether this data gives Facebook an undue competitive advantage in particular on the online classified ads sector, where people buy and sell goods every day, and where Facebook also competes with companies from which it collects data,” she said in a statement.
The UK Competition and Markets Authority (CMA) is also examining whether Facebook’s use of data has given it “an unfair advantage over competitors in providing services for online classified ads and online dating.”
“The CMA will look into whether Facebook has unfairly used the data gained from its advertising and single sign-on to benefit its own services, in particular Facebook Marketplace … and Facebook Dating,” it said in a statement on Friday. Facebook Marketplace allows users and businesses to sell new and second-hand items such as clothing, books and furniture.
“Any such advantage can make it harder for competing firms to succeed, including new and smaller businesses, and may reduce customer choice,” Andrea Coscelli, the CEO of the Competition and Markets Authority added. “We will be working closely with the European Commission as we each investigate these issues,” he said.
A Facebook spokesperson said the company will cooperate fully with the investigations “to demonstrate that they are without merit.”
“We are always developing new and better services to meet evolving demand from people who use Facebook. Marketplace and Dating offer people more choices and both products operate in a highly competitive environment with many large incumbents,” the spokesperson added.
— This is a developing story and will be updated.