Meta Platforms Inc. has been fined €798 million ($841 million, approximately Rs. 7,100 crore) by European Union regulators for breaching antitrust rules by linking its Facebook Marketplace service to its extensive social network. This represents the first fine for the tech company concerning EU antitrust violations.
In a landmark ruling, the European Commission mandated that Meta cease its practice of tying its classified-ads service, Facebook Marketplace, to its social media platform, as well as refraining from imposing unfair trading conditions on competing second-hand goods services.
“Meta has connected its online classified ads service Facebook Marketplace to its personal social network and has enforced unfair trading conditions on other classified ads providers,” stated EU antitrust chief Margrethe Vestager. “This was done to advantage its own service, Facebook Marketplace.”
This ruling adds to a series of challenges faced by Meta. A US judge ruled on Wednesday that the Federal Trade Commission’s antitrust lawsuit against the company would proceed to trial, while Donald Trump’s return as US president has buoyed the social networking app Bluesky, which competes with Meta’s Threads, to the top of the Apple US App Store.
This decision follows an investigation into how Meta leverages Facebook’s vast user base to hinder its competitors. EU regulators disclosed that the California-based company used data from rival platforms that advertised on Facebook to boost its Marketplace service.
Meta has announced plans to appeal the decision in the EU courts, a process that could extend over several years. The company contended that the penalty “overlooks the realities of the thriving European market” and “protects large incumbents.”
Following the ruling, Meta’s shares decreased by as much as one percent after trading commenced in New York. Previously, the EU had fined Meta €110 million for providing misleading information regarding its acquisition of messaging service WhatsApp in 2017.
In a related instance in 2022, Amazon.com Inc. avoided EU fines concerning allegations of exploiting competitor sales data to prioritize its own products. Regulators accepted a series of commitments from Amazon, including a pledge to refrain from using non-public data on independent sellers for its competing retail business.
Facebook Marketplace has also faced scrutiny from other regulatory bodies. It reached a settlement with the UK’s Competition and Markets Authority, agreeing to a number of concessions.
Meta reported a revenue of $40.6 billion (about Rs. 3,42,777 crore) for the quarter ending September 30, marking a 19 percent increase compared to the previous year. The company continues to navigate significant investments in technologies such as artificial intelligence and virtual reality while ensuring growth in its core digital advertising segment.
While the EU can impose fines up to 10 percent of a company’s global sales, penalties are typically smaller and vary based on the nature of the allegations and the specific markets involved. This has fueled frustration among regulators and calls for stricter solutions, including potential structural changes. Similar to the US, the EU is evaluating a possible breakup of Alphabet Inc.’s Google to address concerns regarding its dominance in adtech.
The newly enacted Digital Markets Act strengthens traditional antitrust laws by implementing stringent regulations on Silicon Valley firms. The European Commission has initiated investigations into both Google and Meta to assess their adherence to the DMA, while Apple Inc. is expected to face the EU’s first fine for non-compliance with the new regulations. This week, Meta proposed changes in its advertising targeting methods on Facebook and Instagram in an effort to mitigate the impact of escalating investigations.
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