EU fines Meta $1.4b for ‘abusive practices’ on Facebook Marketplace

Photo / Dean Purcell

The European Commission fined Meta €798 million ($1.4b) Thursday over allegations that it unlawfully used its signature social media platform to power its classified-ads service, Facebook Marketplace.

The executive body of the 27-nation European Union found that Meta broke EU antitrust laws by closely linking Facebook with its classified-ads business, giving it a “distribution advantage which competitors cannot match”.

In addition, the European Commission accused the tech giant, which also owns Instagram and WhatsApp, of “imposing unfair trading conditions” on third parties that seek to advertise on its platforms, allowing it to channel data from those ads to boost Marketplace.

The EU said the conduct amounted to “abusive practices” that gave the company an unfair leg up.

Meta has been ordered to immediately halt its illegal conduct, Margrethe Vestager, the European Commission’s antitrust chief, said in a statement.

Meta said it would appeal the decision.

“This decision ignores the realities of the thriving European market for online classified listing services and shields large incumbent companies from a new entrant, Facebook Marketplace, that meets consumer demand in innovative and convenient new ways,” the company said in a blog post.

The European Commission, which serves as the bloc’s top antitrust enforcer, launched an investigation in 2021 into whether the tech giant was violating regional competition rules, specifically looking at the role Marketplace played in maintaining its dominance. Reuters reported in July that Meta was expected to be fined as a result of the probe.

Last year, Meta agreed to limit what data from its other business it uses to fuel Facebook Marketplace to settle similar complaints from Britain’s competition authority.

European enforcers in July separately accused Meta of violating their sweeping new competition rule book, the Digital Markets Act, by forcing users across its platforms to decide whether to pay to skip ads. The regulations, which took effect in March, represent the most significant global attempt to place new guardrails on competitive abuses in the tech sector.

Meta announced this week that it plans to reduce the subscription cost it would charge for users not to see ads in the EU, and that those who choose to use its site without paying would see fewer personalised ads.

“However, we remain committed to personalised advertising, which will always be the cornerstone of a free and inclusive internet,” the company said.