EU’s Anti-trust investigations into Facebook: Tech giant versus the Single Market

By Valentina Alexandru

What is maybe the most expansive advertising platform of all times – the Facebook Marketplace – has fallen under the radar of the European Union plus the UK, as suspicions arose as to how the data obtained from the advertising service is used. The antitrust investigation would shed light on whether the tech giant uses the data to influence competition within the internal market and the UK. 

In the words of European Commission Executive Vice-President Margrethe Vestager, ‘in today’s digital economy, data should not be used in ways that distort competition’. The Executive Vice-President has established as a political priority for her mandate to create ‘A Europe Fit for the Digital Age’. As she has made a target from investigating the Big Tech companies, Facebook is next in line. The Marketplace has seen a sharp rise ever since its creation in 2016, and at the moment is used by advertisers in 70 countries around the world, from which Facebook collects data that might be used to compete with them and therefore unduly influence competition. As online shopping has dramatically increased during the pandemic, Facebook President Mark Zuckerberg declared that the Marketplace has registered one billion users per month. The EU and UK authorities believe that Facebook’s behaviour affects both competitors, as competition within sectors where Facebook operates is impacted, for example classified ads, and customers, whose choice becomes limited. The competent authorities of the Union and the former Member State are determined to cooperate in this matter. 

As a response to the news about the investigation, a Facebook representative declared that they are constantly improving their services in order to meet the ever-changing requirements of their users. According to them, the Marketplace offers buyers a great range of products, whilst ensuring a highly competitive environment for the sellers. Facebook also believes that the investigations lack merit.

As they reach more and more people, tech giants attract more and more scrutiny. During the pandemic, they gained momentum and governments have started to better regulate their activity.France and Germany announced that the G7 have prepared what has been described as ‘a historic tax deal’, targeting large companies that fail to pay their taxes, as the Biden Administration has reopened talks on the matter. The announcement came prior to the first in-person meeting in two years by the G7 members – Italy, France, Germany, UK, US, Canada, and Japan. The French Finance Minister told BBC that the group is ‘just one millimetre away from a historic agreement’, as measures of getting multinationals including the Big Five to pay their fair share of taxes have long been desired. The members are confident that the deal will be closed by the end of their meeting, where EU representatives have also been invited, as well as representatives from India, Japan, Australia, South Korea and South Africa. 

The announced antitrust investigations are not the beginning, but instead represent just one of many challenges Facebook faced in the past years. Back in 2019, Germany has also made efforts to curb user data collection, which has resulted in ongoing court proceedings. The German Chief Cartel Office ordered the tech giant to limit its collection of user data, on claims of abuse of its dominant position within the market. Facebook has appealed the decision, and the German Court has now requested the guidance of the European Court of Justice.  This is perceived as a strategy to postpone the issuance of a ruling in the two-year long proceeding, that would determine if the Cartel Office acted ultra vires by subjecting data protection to the rules of EU competition. Moreover, the French antitrust authorities have recently announced that Facebook is willing to make a compromise and offer straightforward and impartial conditions that would facilitate its partners’ access to advertising inventories and ad campaign data, after a complaint from a French advertising company. 

The 2014 Facebook/WhatsApp merger case concluded that the rules of EU competition do not cover privacy issues, which instead are covered by the rules on data protection. The investigations announced recently by the EU, as well as the UK, have the potential to overturn this situation in favour of the users whose privacy rights are at stake, and as suspected by the EU authorities, whose personal information is used to decide the conditions of competition within the single market. One thing is for certain, that it will be difficult for Facebook to escape the determination of Ms. Vestager, who promised to better prepare Europe for the Digital Age.

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