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Meta Platforms (META) is moving lower today after it was hit with a formal complaint from European Union (EU) antitrust watchdogs for allegedly squeezing out classified ad rivals by tying its Facebook Marketplace to the Facebook social network. The EU watchdog also expressed concerns that Meta Platforms imposed unfair trading conditions that allows it to use data on competing online classified ad services.
The European Commission today issued a statement of objections to Meta Platforms, paving the way for potential fines for the company’s business model. EU Antitrust Commissioner Vestager said, “our primary concern is that Meta ties its dominant social network Facebook to its online classified ad services called Facebook Marketplace,” meaning “Facebook users have no choice but to have access to Facebook Marketplace.”
This newest allegation against Meta Platforms is the latest round of an EU-wide crackdown on the market power of mega-cap tech companies such as Alphabet (GOOGL), Apple (AAPL), and Amazon.com (AMZN) that has led to multiple probes, fines, and beefed-up antitrust laws. The EU previously fined Facebook for failing to provide the correct information in the merger review of its WhatsApp takeover. Also, Meta Platforms is the subject of investigations in Germany and the UK.
The EU regulator has been investigating Meta Platform’s Facebook since 2019. Meta has sought to curb the probe with lawsuits to limit what information EU officials could use against it. Today’s move against Meta Platforms comes as the EU is set to announce a settlement in a similar probe into how Amazon.com uses rivals’ sales data and whether it unfairly favors its own products.
Despite this newest probe of Meta Platforms, the EU today closed an antitrust probe into an advertising pact between Meta Platforms and Alphabet’s Google, called “Jedi Blue,” after concluding the agreement didn’t hurt competition. The EU, which began the antitrust probe against Meta Platforms and Alphabet in March, said its initial concern that the pact could have squeezed competitors out of the market for ads on publisher websites and apps proved to be unfounded.
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On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes.
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