EU, UK launch antitrust investigations into Facebook's use of confidential ad data


Published: 2021-06-04 15:26

Last Updated: 2022-12-06 15:50

EU, UK launch antitrust investigations into Facebook's use of confidential ad data
EU, UK launch antitrust investigations into Facebook's use of confidential ad data

European Union (EU) and UK regulators have launched a formal competition investigation into Facebook simultaneously Friday.

According to the UK’s Competition and Markets Authority (CMA), they are investigating whether the technology conglomerate is abusing its dominant position in social media of the digital advertising world through its collection and use of ad data.

They announced it will be launching a probe to determine whether Facebook has unfairly used data gained from its advertising or single sign-on option, known as Facebook Login, to benefit its buying and selling platform, Facebook Marketplace.

The CEO of CMA, Andrea Coscelli said the authority intends to thoroughly investigate Facebook’s use of data.

This will be done to “assess whether its business particles are giving it an unfair advantage in… classified ad sectors,” said Coscelli.

Such advantages will make it difficult for the chance of fair competition, especially for small businesses, he said.

Moreover, the EU said it will also be opening a formal antitrust probe to assess whether Facebook has broken any rules “by using advertising data gathered in particular from advertisers in order to compete with them in markets where Facebook is active such as classified ads.”

The EU noted the probe will be conducted to determine whether the relationship between Facebook and the Facebook Marketplace breaches EU competition law.

The European Commission’s executive vice president, Margrethe Vestager, noted that Facebook sees three billion users on a monthly basis, adding that around seven million firms advertise with them in total.

“Facebook collects vast troves of data on the activities of users of its social network and beyond, enabling it to target specific customer groups.”

She stated the EU will be probing whether this data gives them an unfair advantage.

“In today’s digital economy, data should not be used in ways that distort competition,” added Vestager.

In turn, a Facebook spokesperson said the company always seeks to develop 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. We will continue to cooperate fully with the investigations to demonstrate that they are without merit.”

Facebook's share price was down a little over one percent in the premarket to $322 a share on the back of these announcements.