Tech Giant Facebook is being investigated by EU and UK competition watchdogs over its use of advertising data to gain advantages over its rivals. While the European Commission is investigating unfair advantages over its competitors in classified ads, UK’s Competition and Markets Authority (CMA) is looking into usage of Facebook Marketplace data. Facebook has said that it would cooperate with the investigations and that it shall demonstrate that both the investigations are “without merit”.
The CMA said that while Facebook collected data through advertising services and by letting users sign in to other websites and apps using Facebook credentials, it was investigating if Facebook was using this data to gain an advantage over other businesses through Facebook Market place and Facebook Dating.
Andrea Coscelli, chief executive of UK’s CMA released a press statement saying, “We intend to thoroughly investigate Facebook’s use of data to assess whether its business practices are giving it an unfair advantage in the online dating and classified ad sectors.”
On the other hand, EU said that it had opened a formal antitrust investigation “to assess whether Facebook violated EU competition rules by using advertising data gathered in particular from advertisers in order to compete with them in markets where Facebook is active such as classified ads”.
Margrethe Vestager, the European Commission’s executive vice president in charge of competition policy, said, “Facebook collects vast troves of data on the activities of users of its social network and beyond, enabling it to target specific customer groups.” She also said, “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.”
Both EU and UK are investigating breaches of data and privacy policies and if found guilty, Facebook could face penalties up to 10% of its annual revenue, which in the case would amount to billions of dollars.
