European Union regulators have imposed a significant fine of €798 million ($841 million or approximately Rs. 7,100 crore) on Meta Platforms Inc., marking the company’s first such penalty for antitrust violations within the EU. The fine stems from the company’s practice of linking its Facebook Marketplace service to its broader social media platform.
In an unprecedented ruling, the European Commission has instructed Meta to cease this tying of its classified-ads service to Facebook and to avoid imposing unjust trading conditions on competing second-hand goods platforms.
Margrethe Vestager, the EU’s antitrust chief, stated, “Meta tied its online classified ads service Facebook Marketplace to its personal social network Facebook and imposed unfair trading conditions on other online classified ads service providers. It did so to benefit its own service Facebook Marketplace.”
This fine compounds challenges facing Meta, as a US judge recently allowed the Federal Trade Commission’s antitrust lawsuit against the tech giant to proceed to trial. Furthermore, the recent election of Donald Trump as US president has benefited competing platforms, such as Bluesky, which surged to the top of Apple’s US App Store.
Trump, who previously labeled Facebook “an enemy of the people,” has previously suggested that Meta CEO Mark Zuckerberg should be held accountable legally.
The fine is expected to be one of the final actions taken by Vestager, who is slated to depart her position before the year concludes. Over her tenure, she has been a formidable force in regulating Silicon Valley, imposing over €8 billion in antitrust fines against companies like Google.
This fine arose from an investigation into how Meta exploits Facebook’s vast user base to marginalize competitors. EU officials indicated that the Californian company has also used data from rival platforms that advertise on Facebook to enhance its Marketplace service.
Meta intends to contest the ruling in the EU courts, a process that may take years. The company criticized the fine as failing to reflect the realities of the competitive landscape in Europe, arguing that it protects large established firms.
Following the announcement, Meta’s shares dropped by as much as one percent in early New York trading. The company had previously faced a €110 million fine from the EU merger regulator for providing misleading information concerning its acquisition of WhatsApp in 2017.
In a related context, Amazon.com Inc. avoided similar EU fines in 2022 after regulators investigated whether the company unfairly used competitors’ sales data to boost its own products. Amazon managed to appease regulators with commitments to refrain from utilizing private data from independent sellers on its platform for its retail business.
Meta’s Marketplace has also attracted scrutiny from other regulatory bodies, including the UK’s Competition and Markets Authority, with which it reached a settlement after agreeing to various concessions.
In the third quarter ending September 30, Meta reported revenues of $40.6 billion (around Rs. 3,42,777 crore), a 19 percent increase from the prior year. The company continues to balance substantial investments in emerging technologies like artificial intelligence and virtual reality with the need to maintain growth in its core digital advertising operations.
While the EU has the authority to impose fines of up to 10 percent of global sales, penalties are typically lower and take into consideration the severity of allegations and the specific market segments involved, leading to frustration among regulators and calls for more substantial reforms.
The recent development aligns with the EU’s new Digital Markets Act, which strengthens traditional antitrust regulations by instituting rigorous controls on major tech companies. The European Commission has initiated investigations into compliance from both Google and Meta, and Apple Inc. is also expected to face penalties for not adhering to the new regulations. Meanwhile, Meta has proposed alterations to its advertising strategies on Facebook and Instagram in an attempt to mitigate ongoing scrutiny.
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