LONDON — Regulators in the U.K. and the EU launched formal competition investigations into Facebook at the same time on Friday, marking a rare coordinated probe on a big U.S. tech firm.
The U.K.’s Competition and Markets Authority said it is investigating whether Facebook is abusing a dominant position in the social media or digital advertising markets through its collection and use of ad data.
The CMA said it will look into whether Facebook has unfairly used the data gained from its advertising and single sign-on option, known as Facebook Login, to benefit its buying and selling platform, Facebook Marketplace, as well as its online dating service, Facebook Dating.
Andrea Coscelli, chief executive of the CMA, said in a statement: “We intend to thoroughly investigate Facebook’s use of data to assess whether its business practices are giving it an unfair advantage in the online dating and classified ad sectors.”
He added: “Any such advantage can make it harder for competing firms to succeed, including new and smaller businesses, and may reduce customer choice.”
Meanwhile, The European Commission, the executive arm of the EU, said it was opening a formal antitrust investigation to assess whether Facebook breached its 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 investigation will also seek to determine whether the link between the main Facebook social network and Facebook Marketplace is in breach of EU competition rules.
Margrethe Vestager, the European Commission’s executive vice president, said in a statement: “Facebook is used by almost 3 billion people on a monthly basis and almost 7 million firms advertise on Facebook 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.”
“We will look in detail at whether this data gives Facebook an undue competitive advantage in particular on the online classified ads sector, where people buy and sell goods every day, and where Facebook also competes with companies from which it collects data. In today’s digital economy, data should not be used in ways that distort competition,” added Vestager.
Big tech firms are facing increasing amounts of scrutiny around the world as their products continue to impact billions of people’s lives. The European Commission has launched probes into Amazon, Google and Microsoft over the last few years, while the CMA has also launched probes into Google and Apple since it became an independent regulator in its own right in January following Britain’s exit from the EU.
A Facebook spokesperson said: “We are always developing 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.”
The company’s share price was down a little over 1% in the premarket to $322 a share on the back of the announcements.
