Facebook is facing a fresh pair of antitrust probes in Europe. The U.K.’s Competition and Markets Authority (CMA) and the EU’s Competition Commission both announced formal investigations into the social media giant’s operations today — with what’s likely to have been coordinated timing.
The competition regulators will scrutinize how Facebook uses data from advertising customers and users of its single sign-on tool — specifically looking at whether it uses this data as an unfair lever against competitors in markets such as classified ads.
The pair also said they will seek to work closely together as their independent investigations progress. With the U.K. outside the European trading bloc (post-Brexit), the national competition watchdog has a freer rein to pursue studies that may be similar to or overlap with antitrust probes the EU is also undertaking.
And the two Facebook investigations do appear similar on the surface — with both broadly focused on how Facebook uses advertising data. (Though outcomes could, of course, differ.)
The danger for Facebook, here, is that a higher dimension of scrutiny will be applied to its business as a result of dual regulatory action — with the opportunity for joint working and cross-referencing of its responses (not to mention a bit investigative competition between the U.K. and the EU’s agencies).
The CMA said it’s looking at whether Facebook has gained an unfair advantage over competitors in providing services for online classified ads and online dating through how it gathers and uses specific data.
Specifically, the U.K.’s regulator said it’s concerned that Facebook might have gained an unfair advantage over competitors providing services for online classified ads and online dating. Facebook plays in both spaces, of course, via Facebook Marketplace and Facebook Dating, respectively.
In a statement on its action, CMA CEO Andrea Coscelli said: “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. Any such advantage can make it harder for competing firms to succeed, including new and smaller businesses, and may reduce customer choice.”
The European Commission’s investigation will — similarly — focus on whether Facebook violated the EU’s competition rules by using advertising data gathered from advertisers to compete with them in markets where it is active. Although it only cites classified ads as its example of the neighboring market of particular concern for its probe.
The EU’s probe has another element, though, as it said it’s also looking at whether Facebook ties its online classified ads service to its social network in breach of the bloc’s competition rules.