Meta Platforms Inc. faces a €798 million ($841 million or roughly Rs. 7,100 crore) fine from European Union regulators for tying its Facebook Marketplace service to its social network, marking its first EU antitrust violation. The European Commission has ordered Meta to sever this tie and stop imposing unfair conditions on competing second-hand goods platforms.
EU antitrust chief Margrethe Vestager stated, “Meta linked its online classified ads service, Facebook Marketplace, to its social network, Facebook, and imposed unfair trading conditions on other online classified ads service providers to benefit its service.”
This decision compounds troubles for Meta. A US judge has allowed the Federal Trade Commission’s antitrust lawsuit against Meta to proceed to trial. Furthermore, the recent election of Donald Trump as US president spurred the popularity of the competing social networking app Bluesky, pushing it to the top of Apple Inc.’s US App Store rankings.
Trump has previously labelled Facebook an “enemy of the people” and suggested that CEO Mark Zuckerberg should face imprisonment.
The EU’s fine could be one of Vestager’s final acts, as she is expected to leave her position by year-end. Known as a stringent critic of Silicon Valley, she has imposed billions of euros in antitrust fines over the past decade, including more than €8 billion against Google alone.
The probe revealed that Meta leveraged Facebook’s vast user base to edge out rivals and used data from competing platforms advertising on Facebook to enhance its Marketplace service. Meta has announced plans to appeal the decision, arguing that the fine overlooks the competitive reality of the European market and unfairly protects large, established companies.
Following the announcement, Meta’s shares dropped by as much as one per cent. Previously, Meta was fined €110 million for providing misleading information during its acquisition of WhatsApp in 2017. In contrast, Amazon avoided similar EU fines in 2022 by agreeing to stop using confidential data from independent sellers to take advantage of its products.
Facebook’s Marketplace has also been scrutinized by other regulators, including a settlement with the UK’s Competition and Markets Authority that involved several concessions.
Meta reported a 19% increase in sales to $40.6 billion for the quarter ending September 30. The company continues to invest heavily in technologies like artificial intelligence and virtual reality while maintaining growth in its core digital advertising business.
EU fines can reach up to 10% of global sales, but penalties generally are less severe, considering the gravity of the allegations and the specific markets involved. This has led to regulator frustration and calls for stricter remedies, such as potentially breaking up Alphabet Inc.’s Google to address adtech dominance concerns.
The newly enacted Digital Markets Act strengthens traditional antitrust laws by setting strict limits for Silicon Valley firms. The European Commission has initiated probes into Google and Meta to check their compliance with the DMA, and Apple may soon face the bloc’s first fine for non-compliance. Recently, Meta proposed changes to its ad targeting practices on Facebook and Instagram to address escalating investigations.
