European Commission tells Meta that Facebook Marketplace is unfair to rivals

Europe has hit Facebook owner Meta with a complaint that its Marketplace classified service is unfair to competitors. By tying its main social media site to Marketplace, it has a "substantial distribution advantage" over rivals, the EU Commission wrote in a press release.

"With its Facebook social network, Meta reaches globally billions of monthly users and millions active advertisers," EU Antitrust Commissioner said in a statement. "Our preliminary concern is that Meta ties its dominant social network Facebook to its online classified ad services called Facebook Marketplace. This means that users of Facebook automatically have access to Facebook Marketplace, whether they want it or not."

In addition, the Commission found that Meta imposes imposes unfair trading conditions on competitors that advertise on Facebook or Instagram. That essentially allows it to use "ads-related data derived from competitors for the benefit of Facebook Marketplace," it said. The practices, if confirmed, would infringe on EU rules that prohibit the abuse of a dominant market position. The EU has the power to impose a fine of up to 10 percent of Meta's annual revenue and prohibit the behavior.

In a statement, Meta's head of EMEA competition said the "claims made by the European Commission are without foundation" and that the company "will continue to work with regulatory authorities to demonstrate that our product innovation is pro-consumer and pro-competitive."

Last year, the EU Commission launched an antitrust probe into Facebook's classified advertising practices to determine if it broke competition rules by using advertiser data to its own benefit. The so-called Statement of Objects released today is a formal step in EU antitrust investigations, informing parties of complaints raised against them. Meta can now examine the documents, reply in writing and request an oral hearing to present their comments, according to the Commission.