The EU announced a fine of 798 million euros to Meta, owner of Facebook and Instagram, for anti-competitive practices in the online advertising market. According to the European Commission – the executive arm of the EU – Goal ““Links your online classifieds service Facebook Marketplace — a virtual store — to your personal social network Facebook.”.
Meta denies breaking the law and will appeal. In the company’s view, the Commission’s decision “ignores the realities of the powerful European online advertising market… Facebook users can choose whether or not to interact with Marketplace, and many do not. The reality is “that people use Facebook Marketplace because they want to, not because they have to; it is disappointing that the Commission has chosen to take action against a free and innovative service built to meet consumer demands.”
For the Commission, Meta “is dominant in the market for personal social networks.” By linking its online classifieds service Facebook Marketplace to its social network Facebook, “all Facebook users automatically have access and are exposed to Facebook Marketplace whether they want it or not,” he said. The Commission accused Meta of “unilaterally imposing unfair commercial conditions on other online classified advertising service providers advertising on Meta’s platforms, in particular (…) Facebook and Instagram.”
In this way, Facebook Marketplace benefits from “a substantial distribution advantage that competitors cannot match.”
Abuse of dominant position
The Commission concluded that Meta “abuses its dominant position.” The value of the fine, the Commission noted, was defined by “the duration and severity of the violation,” and also took into account the benefits of Meta, which in 2023 recorded some $135 billion.
Since the EU adopted two rigid laws to bring order to the digital market, the Commission has already had several confrontations with Meta. These are the Digital Services Law (LSD) and the Digital Markets Law (LMD) that contemplate heavy fines for companies that do not comply with the regulations.
Following that pressure, Meta announced this week that it would offer users who don’t pay for Facebook and Instagram on the block the option to receive fewer targeted ads. And he promised to reduce subscription fees for completely ad-free services.
In March of this year, the European Commission fined Meta for around 1.8 billion euros for abuse of a dominant position and restrictive rules in the distribution of music online.
