Facebook caught as Europe expands Big Tech antitrust probes

Facebook joined Google, Apple and Amazon in the antitrust hotseat on Friday as the EU and U.K. competition regulators opened parallel probes into how the social networking giant uses data from advertisers to compete with them.

The European Commission in Brussels is focusing its investigation for now on how Facebook uses the data for its Marketplace service, where users can buy and sell goods from each other, but it could still include other services in the course of its investigation. The U.K. Competition and Markets Authority in London is probing not only Marketplace but also how the company uses data for Facebook Dating — the dating profile service it launched in Europe in 2020.

The new probes come as regulators across Europe are ramping up efforts to rein in the power of the largest tech companies. Apart from a series of antitrust investigations, the EU also proposed a Digital Markets Act to put curbs on online companies designated as gatekeepers, while the CMA in April launched a Digital Markets Unit to focus on internet platforms.

“Facebook collects vast troves of data on the activities of users,” Commission Executive Vice President Margrethe Vestager said in a statement. “We will look in detail at whether this data gives Facebook an undue competitive advantage.”

U.K. competition chief Andrea Coscelli said: “Any such advantage can make it harder for competing firms to succeed, including new and smaller businesses, and may reduce customer choice.”

Before the U.K. left the EU, antitrust enforcement by the European Commission prevented British officials from investigating the same behavior. While the Facebook probe is not the first competition issue being investigated on both sides of the Channel — Google’s Privacy Sandbox and Apple’s App Store preceded it — this is the first time the regulators have coordinated the timing of their investigations, which were both announced at the same time on Friday.

“We will be working closely with the European Commission as we each investigate these issues,” the CMA’s Coscelli said. The Commission said it will “seek to work closely with the CMA as the independent investigations develop.”

Unfair advantage

Apart from its probe into Facebook’s use of data, the Commission is also zeroing in on whether the company improperly imposed its Marketplace on the hundreds of millions of users of its social network in Europe. The Commission has in the past found this practice of “tying” or “bundling” gave an unfair advantage to Microsoft’s Windows Media Player or a number of Google apps that were pre-installed on smartphones using the Android operating system.

Facebook said it will “continue to cooperate fully with the investigations to demonstrate that they are without merit.” 

“Marketplace and Dating offer people more choices and both products operate in a highly competitive environment with many large incumbents,” the company said.

Facebook had long managed to stay out of the clutches of Brussels antitrust enforcers as they went after other Silicon Valley giants. After several probes into Microsoft and Google that ended with billions of euros in fines, the Commission launched formal investigations into Amazon’s marketplace in 2019 and Apple’s App Store and payment system in 2020.

“It was about time the European Commission opened this Facebook case,” said Cristina Caffarra, a competition economist at consultancy firm Charles River Associates. “Brussels is losing its international mojo as a result of the slow pace and often disappointing results of its antitrust probes.”

The U.K. investigation will also look into Facebook’s use of a log-in function that allows its users to sign into multiple websites and digital services via their Facebook profile. That function could have allowed the tech giant to gain preferential access to data that tilted the online scales unfairly in its favor.

Both investigations will take months — in the EU’s case likely years — to complete and have yet to determine any wrongdoing.

In another sign of the increasing scrutiny of the world’s largest digital platforms, the coordinated announcements from Brussels and London came just hours after the German competition authority announced a new investigation of Google’s latest news product. Germany saw a proliferation of such cases after the introduction of new rules to prohibit abusive behavior before it takes place within markets where firms are not yet dominant.

Mark Scott contributed reporting.

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