EU fines Meta $840 million for ‘abusive’ Facebook advertising practices

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The EU on Thursday imposed a fine of almost 800 million euros on online giant Meta for violating antitrust rules by giving users of its social network Facebook automatic access to the Facebook Marketplace classified advertising service.

The European Commission said the US tech giant has also abused its dominant position by imposing unfair trading conditions on other online advertising providers that advertise on its platforms.

“This is illegal under EU antitrust rules. Meta must stop this behavior now,” the bloc’s competition chief Margrethe Vestager said in a statement.

Meta said it would appeal, claiming the decision “ignored the reality of the booming European market for online classified listing services.

“Facebook users can choose whether or not to use Marketplace, and many don’t. The reality is that people use Facebook Marketplace because they want to, not because they have to,” the company said in a statement.

Among the 10 largest antitrust fines ever imposed by the 27-nation European Union, it is the latest in a series of tough penalties imposed on Big Tech companies in recent years by the commission, the bloc’s regulator.

The commission explained what it called “abusive practices” by Meta, saying that because Facebook Marketplace was linked to Facebook, the former enjoyed a “substantial distribution advantage that competitors cannot match.”

“All Facebook users automatically access and are exposed to Facebook Marketplace on a regular basis, whether they want to or not,” the report said.

In addition, Meta imposed unfair terms on competitors in the classified ad service that advertised on Facebook and Instagram, the commission said.

This allowed it to “use advertising-related data generated by other advertisers solely for the benefit of Facebook Marketplace,” the company said.

Meta, which also owns WhatsApp and Instagram, claimed it “did not use advertisers’ data for this purpose” and “has 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,” the company said.

According to the EU, Meta’s dominant position in the market for personal social networks carries a special responsibility not to abuse it by restricting competition.

The committee opened a formal procedure against possible anti-competitive behavior by Facebook in June 2021, raised its concerns with Meta in December 2022 and received the company’s response in June 2023.

The EU fined the company 797.72 million euros ($840 million), an amount the commission said took into account the “duration and severity of the infringement” as well as the turnover of Meta and Facebook Marketplace.

Meta’s total revenue last year was approximately $135 billion.

The European Commission has had several clashes with Meta as part of a broader crackdown on Big Tech abuse practices.

The policy arsenal has been expanded in the past two years with major laws, the Digital Services Act and the Digital Markets Act, which carry huge financial penalties in case of violations.

In July, the EU accused Meta of breaking digital rules with its new ‘pay or consent’ system. It meant users had to pay to prevent data collection, or agree to share their data with Facebook and Instagram to continue using the platforms for free.

Under pressure from EU regulators, Meta announced this week that it is offering non-paying users in the bloc the option to receive less targeted ads, and reducing subscription rates for completely ad-free services.