Meta has received a warning from the European Commission for breaching antitrust laws in how it operates Facebook Marketplace.

Facebook Marketplace is an ecommerce platform which allows users to buy and sell products, while also offering the ability to give away unwanted items.

However, the Commission has warned Meta that it is in violation of EU antitrust laws for distorting competition in markets for online classified advertising. It also warned Meta of abusing its dominant position.

In specific, the preliminary view states: “First, Meta ties its online classified ads service Facebook Marketplace with its dominant personal social network Facebook. This means that users of Facebook automatically have access to Facebook Marketplace, whether they want it or not. The Commission is concerned that competitors of Facebook Marketplace may be foreclosed as the tie gives Facebook Marketplace a substantial distribution advantage that competitors cannot match.”

And: “Second, Meta unilaterally imposes unfair trading conditions on competing online classified ads services which advertise on Facebook or Instagram. The Commission is concerned that the terms and conditions, which authorise Meta to use ads-related data derived from competitors for the benefit of Facebook Marketplace, are unjustified, disproportionate and not necessary for the provision of online display advertising services on Meta's platforms. Such conditions impose a burden on competitors and only benefit Facebook Marketplace.”

The commission will now further investigate Meta, and said that it could impose a fine of up to 10 per cent of its annual global turnover should there be sufficient evidence that the Facebook company is infringing EU rules.

Commenting on the findings, the EU’s antitrust chief Margrethe Vestager said: “With its Facebook social network, Meta reaches globally billions of monthly users and millions of active advertisers. Our preliminary concern is that Meta ties its dominant social network Facebook to its online classified ad services called Facebook Marketplace.

“This means Facebook users have no choice but to have access to Facebook Marketplace. Furthermore, we are concerned that Meta imposed unfair trading conditions, allowing it to use of data on competing online classified ad services. If confirmed, Meta’s practices would be illegal under our competition rules.”

Tim Lamb, a spokesperson for Meta, said that the claims “are without foundation” and that “we will continue to work with regulatory authorities to demonstrate that our product innovation is pro-consumer and pro-competitive."

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