The European Commission has opened a formal investigation into Facebook on suspicion that the social network is violating the rules of free competition by using advertising data from its advertisers to compete with them in the markets in which it is present; an inertia that directly affects their online classifieds service, ‘Facebook Marketplace’.
The powerful social network, used by almost 3 billion people a month; a colossal audience that is used by around seven million companies “collects large amounts of data on the activities of users of its social network and beyond, allowing it to target specific customer groups,” explained the Commissioner for Competition. Margrethe Vestager. “We will take a closer look at whether this data gives Facebook an undue competitive advantage, particularly in the online classifieds industry, where people buy and sell products 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 a way that distorts competition, “he remarked.
Its ‘Marketplace’, indicated directly in the investigation, is an integrated platform that allows the purchase and sale of products among the users themselves. Brussels wants to determine if it would be damaging competition in relation to other markets where Mark Zuckerberg’s company is also present thanks to its social network, “in particular in the sector of online classifieds”.
By advertising their services on Facebook, according to the Community Executive, external companies, which in turn are their competition “can provide” data “commercially valuable that the California giant” could use to compete with the companies that provided them.
The Commission is concerned that Facebook may distort competition from online classified ad services. In particular, “Facebook could make use of data obtained from competing providers in the context of its advertising on the Facebook social network, to help Facebook Marketplace to overcome them.”
It could, for example, “receive precise information about the preferences of users of the advertising activities of its competitors and use this data to adapt its own platform. This investigation moves on parameters similar to the one that is underway with other technological giants such as Google.