The European Commission has fined Meta €797.72 million for violating EU antitrust rules. Meta's online classifieds service, Facebook Marketplace, was found to be unfairly linked to its social networking platform, Facebook, and that Meta imposed unfair business terms on other online classifieds providers.

Meta is an American multinational technology company. Its core product is the social networking platform, Facebook. It also offers an online classifieds service called "Facebook Marketplace," where users can buy and sell goods.

The Commission's investigation found that Meta has a dominant position in the market for social networking services, which includes at least the entire European Economic Area (hereinafter referred to as "EEA"), and also in the national markets for online advertising on social networks.

The Commission found that Meta abused its dominant position in violation of Article 102 of the Treaty on the Functioning of the European Union ("TFEU") by:

  • linking its online classifieds service, Facebook Marketplace, to its social networking platform, Facebook. This means that all Facebook users automatically have access to and are regularly exposed to Facebook Marketplace, whether they want to or not. The Commission found that competitors of Facebook Marketplace may be excluded from the market because this link provides Facebook Marketplace with a significant distribution advantage that competitors cannot match.
  • unilaterally imposing unfair business terms on other online classifieds providers that advertise on Meta's platforms, particularly its very popular social networks, Facebook and Instagram. This allows Meta to use advertising-related data generated by other advertisers exclusively for the benefit of Facebook Marketplace.
The Commission ordered Meta to cease this practice and to refrain from repeating the illegal conduct or from adopting practices with a similar purpose or effect in the future.

The fine of €797.72 million was set based on the Commission's guidelines on fines from 2006 (see press release and MEMO).

In determining the amount of the fine, the Commission took into account the duration and severity of the illegal conduct, as well as the turnover of Facebook Marketplace, which was affected by the illegal conduct and which therefore determines the basic amount of the fine. In addition, the Commission took into account Meta's overall turnover to ensure a sufficient deterrent effect for a company with the significant resources that Meta possesses.

"Today, we have fined Meta €797.72 million for abusing its dominant position in the markets for personal social networks and online advertising services on social media platforms. Meta linked its Facebook Marketplace online advertising service to its personal social network, Facebook, and imposed unfair trading conditions on other providers of online advertising services. This was done to benefit its own Facebook Marketplace service, giving it advantages that other online advertising service providers could not match. This is illegal under EU antitrust rules. Meta must now cease this behavior," said Executive Vice-President in charge of competition policy, **Margrethe Vestager.**

In June 2021, the Commission initiated formal proceedings regarding a possible anti-competitive action by Facebook. In December 2022, the Commission sent Meta a statement of objections, to which Meta responded in June 2023.

Article 102 of the Treaty on the Functioning of the European Union and Article 54 of the EEA Agreement prohibit the abuse of a dominant position.

A dominant position in the market is not, in itself, illegal under EU antitrust rules. However, dominant companies have a special responsibility not to abuse their strong market position by restricting competition, either in the market in which they are dominant or in separate markets.

Fines imposed on companies that violate EU antitrust rules are paid into the general budget of the EU. These revenues are not earmarked for specific expenditures, but the contributions of Member States to the EU budget for the following year are reduced accordingly. Therefore, these fines help to finance the EU and reduce the burden on taxpayers.

Further information on this case will be available under case number AT.40684 in the public register of cases on the Commission's website dedicated to competition policy, once confidentiality issues have been resolved.

EC / gnews - RoZ

ILLUSTRATIVE PHOTO - pixabay