Huge market power abused? EU Commission investigates Facebook

Facebook has become the focus of the EU antitrust authorities: the world's largest online network could be violating EU law by misusing the data of its advertising customers. Facebook is not the first U.S. Internet company to be scrutinized by the EU.

The EU antitrust authority has launched investigations against Facebook for violations of competition law. The proceedings are about whether the online giant is violating EU law with its Facebook Marketplace classifieds service. This was announced by EU Competition Commissioner Margrethe Vestager.

 Via Marketplace, users of the social network can privately buy and sell goods from each other. According to the EU Commission, it wants to clarify whether Facebook is exploiting its position in other markets for this service in an anti-competitive manner. If competing companies advertised their services on the largest social network, Facebook could come into possession of commercially valuable data and then use it against competitors, according to the suspicion.

Facebook believes the case is unfounded. "We will continue to cooperate fully with the investigation to show that it is baseless," the U.S. company said. Regarding the allegations, it said only: "We continue to develop new and better services to meet the evolving demand of people who use Facebook. Marketplace and Dating offer people more choice, and both products operate in a very competitive environment with many large providers."

Proceedings against Google, Apple, Amazon

Still, the EU Commission sees reason for intensive scrutiny. "Facebook is used by almost three billion people every month and has a total of almost seven million advertisers," Vestager said. The company collects huge amounts of data on the activities of users of its social network and other services, she said, and is therefore able to target specific groups of customers. For example, Facebook could derive precise information about user preferences from the advertising activities of its competitors.

 Independently of the EU, the British competition authority has also launched an investigation. Facebook is the latest major U.S. technology group to be scrutinized by Vestager. There have already been proceedings against Google, Apple and Amazon.

Facebook's marketplace business, which opened in 2016, now has 800 million users in 70 countries who buy and sell goods via the platform. According to insiders, classifieds providers have complained that Facebook is exploiting its market power to gain competitive advantages.