It’s been a tough week at Meta headquarters, as the European Commission fined the tech giant again for linking Facebook Marketplace, its classifieds service, to Facebook and using non-public advertising data.

Authorities are demanding €797.72 million for Meta, essentially giving Marketplace an unfair advantage over competing digital storefronts. Marketplace was created in 2016 to allow individuals to buy and sell items on social media, typically furniture.

EU says Meta violates antitrust laws and restricts competition

The Commission faces two main problems. The first is that “all Facebook users automatically have access and regular exposure to Facebook Marketplace, whether they like it or not,” and competitors cannot achieve the same level of exposure.

The second is that competitors must consent to Meta using their data if they want to advertise on Facebook or Instagram. This data could benefit Marketplace, and the Commission says requiring it is “unjustified, disproportionate and unnecessary for the provision of online display advertising services on Meta’s platforms.”

The UK’s Competition and Markets Authority has also questioned Meta’s data practices, arguing that they could give Meta an unfair competitive advantage. However, the authority ended its investigation after Meta agreed to limit its use of advertising data and allow advertisers to opt out of having their data used.

Margrethe Vestager, the outgoing European Commissioner for Competitionsaid these practices provide Meta “benefits that other online classifieds service providers could not match.”

“This is illegal under EU antitrust rules. Meta must now stop this behavior,” she said in the statement. press release.

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Meta’s ownership of Facebook and Instagram gives it a dominant position in the social media and social media digital advertising markets. Although this is not illegal in itself, it gives it a responsibility not to abuse its position by restricting competition in these two markets, in accordance with European law.

The Commission first opened a procedure concerning possible anti-competitive behavior by Meta in June 2021 and issued an upfront fee via a Statement of Objections in December 2022.

The fine was calculated taking into account the duration and seriousness of the infringement, as well as the respective turnover figures of Meta and Marketplace. Once paid, the money will go to the general EU budget, reducing member states’ contributions the following year and the burden on taxpayers.

Meta will appeal, rejects claims over Marketplace and advertising data

Meta immediately responded to the Commission’s announcement, saying that it appeal the fine. Mark Zuckerberg’s company claims that the authority “ignores the fact that Facebook users can choose whether or not to engage with Marketplace” and that it does not use competitor data to benefit Marketplace, having ” builds systems and controls to ensure this.”

He added that the Commission “provides no evidence of competitive harm to competitors or harm to consumers”, using eBay, Leboncoin and Marktplaats as examples of competitors that are still successful. Regardless, Meta stressed that European competition law does not “preserve the established commercial positions of incumbent suppliers in the face of innovation.”

Meta also referred to a month of September report by the former president of the European Central Bank, Mario Draghi, who requested a redesign to improve the region’s competitiveness and innovation, arguing that the fine is contrary to these objectives. The tech giant cited this report again a few days ago after concede to regulators regarding its advertising practices.

EU’s continued lawsuit against Meta’s advertising practices

Vestager has long had Meta and competitors such as Apple, Google and Amazon in its sights. The aim of the game is to protect the digital autonomy of EU citizens and hold tech giants accountable for their data collection and privacy practices.

A large portion of Meta’s revenue comes directly from clicks and engagement-targeted ads on Facebook and Instagram. Thus, the loss of a segment of user data as large as the population of the 27 EU countries could harm their continued growth. Meta therefore has a financial interest in giving in to the EU’s demands. In the third quarter of this year, 23.5% of its advertising revenue was generated by European users.

Meta is currently challenging the Commission for including Marketplace and Messenger on the list of core platform services which must comply with the requirements of the DMA, because they provide “an important gateway for business users to reach end users,

A company spokesperson said The edge this Marketplace should not qualify because it is a consumer-to-consumer service and Meta is not in the middle. Compliance with the DMA means Meta will have to follow rules around data sharing and interoperability, which could impact its competitive advantage.

Meta was also fined €110 million by the Commission in 2017 for providing misleading information during its acquisition of WhatsApp three years ago. The company had assured regulators that it could not automatically link user accounts between the two platforms, but later introduced features to do so.

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Over the years, the European Data Protection Commission has Meta was fined several times for having violated GDPR rules based on its targeted advertising practices. In addition to the DMA and GDPR, Meta must comply with Digital Services Acta set of rules designed to regulate how “Very large online platforms“manage privacy, protect their users and operate transparently.

But it’s not just advertising data that is the subject of the war between Meta and the EU. In June, Meta delayed the training of its large language models on public content shared on Facebook and Instagram in Europe after regulators suggested it may be necessary to obtain consent from content owners. Meta AI, its AI border assistant, has still not been launched within the bloc due to its “unpredictable” regulations.

Representatives from Meta, along with Spotify, SAP, Ericsson, Klarna and many others, signed an open letter in September to Europe. expressing concerns about “inconsistent regulatory decision-making.” The letter says interventions by European data protection authorities have created uncertainty over what data they can use to train their AI models.