European Commission Slaps Meta With $840 Million Fine For Violating Antitrust Norms

European Commission Slaps Meta With $840 Million Fine For Violating Antitrust Norms

It is one of the 10 largest penalties imposed by the 27-nation EU against Big Tech

The European Commission, the primary executive arm of the European Union (EU) has fined Meta 797.72 million euros ($840 million) for breaching antitrust rules.

Considering the ‘duration and gravity of the infringement’, the online giant was accused of giving the Facebook users automatic access to classified ads service Facebook Marketplace.

The regulator blamed Meta for abusing its dominant position by imposing unfair trading conditions on other online classified ads service providers that advertise on its platforms.

Margrethe Vestager, the bloc's competition chief stated, "This is illegal under EU antitrust rules. Meta must stop this behavior.”

However, the US tech titan alleged the decision ignored "the realities of the thriving European market for online classified listing services,” and added that it would appeal against the order.’

Facebook explained, “Users have the option to engage with Marketplace, and many do not. People use it because they want to, not because they must.”

Terming it ‘abusive practice’, the Commission said that because Marketplace was tied to Facebook, the former enjoyed a "substantial distribution advantage, which competitors cannot match. All Facebook users automatically have access and get regularly exposed to the Marketplace whether they want it or not.”

The regulator added that Meta imposed unfair conditions on competitors in the classified ads service who advertised on Facebook and Instagram. This allowed it to "use ads-related data generated by other advertisers for the sole benefit of Facebook Marketplace.”

However, Meta, which also owns WhatsApp and Instagram, argued, "We do not use advertisers' data for this purpose and have built systems and controls to ensure that. It is disappointing that the Commission has chosen to take regulatory action against a free and innovative service built to meet consumer demand.”

On the other hand, the EU stressed that Meta's dominant position in the market for personal social networks came with a responsibility not to abuse it by restricting competition.

The Commission began proceedings into possible anticompetitive conduct by Facebook in June 2021. It communicated its concerns to Meta in December 2022 and received a response in June 2023.

The European Commission has had several run-ins with Meta related to the abusive practices of Big Tech.

In the last two years, it introduced two major laws, the Digital Services Act and the Digital Markets Act that carry huge financial penalties for infringements.

In July, the EU accused Meta of breaching the digital rules with its new ‘pay or consent’ system. The users had to pay to avoid data collection or agree to share their data with Facebook and Instagram to keep using the platforms for free.

However, due to pressure from EU regulators, Meta recently announced it was offering non-paying users in the bloc the option of receiving less targeted ads and cutting subscription rates for ad-free services.