Meta could face $11.8 billion in fines after the EU accuses the tech giant of violating antitrust rules

Meta could face $11.8 billion in fines after the EU accuses the tech giant of violating antitrust rules

The European Union issued a ban on Facebook’s parent company Meta on Monday.

With a list of objections to its online classifieds business, Facebook Marketplace.

The European Commission, the EU’s executive arm, said it found that Meta violated EU antitrust laws by distorting competition in markets for online classified ads.

The commission took issue with Meta’s pairing of its Facebook marketplace service, which lets users list items for sale with its personal social network, Facebook.

It said it is concerned that the arrangement gives Facebook Marketplace a “substantial distribution advantage that competitors cannot match.”

Margaret Vestager, the commission’s vice president in charge of competition policy, said Facebook’s deal with Marketplace gives consumers “no choice but to access Facebook Marketplace.”

“Furthermore, we are concerned that Meta has imposed unfair trade terms, allowing it to use data to compete with online classifieds advertising services,” Vestiger said in a statement.

“If confirmed, Metta’s conduct would be unlawful under our competition laws.”

Tim Lamb, head of EMEA competition at Meta, said: “The European Commission’s claims are unfounded.”

“We will continue to work with regulatory authorities to demonstrate that our product innovations are pro-consumer and competitive,” he added.

The commission launched an investigation into Meta in June 2021, examining “potential anti-competitive behavior by Facebook”.

Issuing a company with a statement of objections is a formal step in an EU competition investigation and does not prejudge the outcome of the investigation.

However, if the Commission finds sufficient evidence of infringement even after a company has presented its defence, it may face possible changes in its business practices or fines of up to 10% of global annual revenue.

For Meta, which generated $117.92 billion in annual revenue in 2021, that could mean a fine of up to $11.8 billion.

It would mark the latest setback for Meta, which has faced pressure from investors on its pivot to, among other things, the “metaverse.” The company’s share price has fallen more than 60 percent this year amid a broader decline in technology stocks.

Separately on Monday, the commission closed an investigation into a partnership between Meta and Google that it had previously accused of hindering competition in ad technology.

“After carefully reviewing all relevant evidence, including information received from Google, Meta and other companies active in the tech sector, the Commission concluded that the evidence did not confirm its initial concerns and therefore has decided to close its investigation,” the commission said. said.

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