The competition authorities for the European Union and the United Kingdom on Friday opened antitrust investigations into whether Facebook uses data from advertisers to give itself an upper hand.
The European Commission is focusing its investigation on Facebook’s use of data from competing providers that advertise on the platform to help outcompete them on Facebook Marketplace, a feature where Facebook users can buy and sell goods from one another.
The U.K. Competition and Markets Authority is looking into the social media giant’s use of advertiser data but is also investigating data it gathers through Facebook Dating, the dating profile service launched in Europe in 2020.
Facebook collects “vast troves of data” on its almost 3 billion users and 7 million advertising firms, the European Commission’s Executive Vice-President Margrethe Vestager said in a statement.
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“We will look in detail at whether this data gives Facebook an undue competitive advantage in particular on the online classified ads sector, where people buy and sell goods every day, and where Facebook also competes with companies from which it collects data,” Vestager said.
The Commission said Facebook could be gathering specific information on users’ preferences from competitors’ advertisement activities in order to strengthen its own features and products within Marketplace.
Separately, the Federal Trade Commission and 48 states have sued Facebook in the United States, calling on a federal court to break the social media giant apart from the WhatsApp and Instagram apps, alleging that the company engages in illegal anti-competitive conduct.
The U.K.’s competition authority said it would work in tandem with the EU to investigate Facebook’s use of competitors’ advertising data.
“Any such advantage can make it harder for competing firms to succeed, including new and smaller businesses, and may reduce customer choice,” U.K. Competition and Markets Authority Chief Executive Andrea Coscelli said in a statement.
Facebook said in a statement that it would cooperate fully with the investigations and work to demonstrate that there is no wrongdoing on its part.
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“Marketplace and Dating offer people more choices and both products operate in a highly competitive environment with many large incumbents,” the technology giant said.
