The European Union has imposed a £664 million fine on Meta for engaging in what it described as "abusive" practices related to Facebook Marketplace. The penalty follows a detailed

investigation by the European Commission, which found that Meta abused its dominant position and restricted competition.

Key Findings of the Investigation

The Commission determined that by integrating Facebook Marketplace with its primary social media platform, Meta created a system where users were exposed to the classified ads service regardless of their preference. This approach granted Facebook Marketplace a significant competitive edge over other classified ad platforms, which struggled to achieve similar visibility.

Additionally, Meta was found to have imposed unfair trading terms on other classified ad service providers advertising on its platform, further reinforcing its advantage. As part of the ruling, Meta has been ordered to cease these practices immediately.

First EU Antitrust Fine for Meta

This is the first time the EU has fined Meta under its competition laws. Previously, other tech giants such as Google and Apple have faced multi-billion-euro antitrust penalties from the EU. Margrethe Vestager, the EU's executive vice-president in charge of competition policy, emphasized the illegality of Meta's actions under EU antitrust rules.

"Meta tied Facebook Marketplace to its social network and imposed unfair conditions on competitors to benefit its own service, a clear violation of EU laws," Vestager said. She stressed that dominant companies have a responsibility not to misuse their market power to harm competition.

Meta's Response and Appeal

Meta has rejected the EU’s findings, stating that it will appeal the decision while complying with the ruling in the interim. In a statement, the company argued that the EU's decision disregards the competitive nature of the European online classified ads market. Meta claimed that its Marketplace service offered consumers new, innovative options and did not harm competitors.

The company also contended that users voluntarily engage with Facebook Marketplace and are not forced to use the service. According to Meta, large established platforms like eBay and regional leaders such as Leboncoin, Marktplaats, and Subito have continued to thrive despite the introduction of Marketplace. Meta added that new competitors, like Vinted, have also successfully entered the market.

Broader Implications

The case, which dates back to 2021, highlights ongoing EU scrutiny of Meta's practices. While the UK ended its investigation after Meta made concessions, the EU has maintained its stance. Meta is also under investigation for issues related to child safety and election integrity on Facebook and Instagram, as well as compliance with the EU’s digital regulations.

The company has faced several significant fines under the EU’s privacy laws, including a record-breaking €1.2 billion penalty last year. Despite its challenges, Meta insists that its practices promote innovation and benefit consumers.

This ruling underscores the EU's commitment to enforcing competition laws and curbing the power of major tech companies in the digital market. Photo by Nokia621, Wikimedia commons.