Friday 4 June 2021 10:57 am

Facebook hit with double data crackdown as UK and EU open competition probes

Facebook is facing a two-pronged attack after UK and EU regulators both opened investigations into alleged monopolistic behaviour in the tech giant’s use of advertising data.

The Competition and Markets Authority (CMA) will examine whether the social media platform has gained an unfair advantage over rivals through how it gathers and uses data for classified ads and online dating services.

Meanwhile the European Commission launched a formal probe into whether Facebook violated EU rules by using the data it gathers from advertisers to compete with them in other markets such as classified ads.

Facebook collects data from its digital advertising services, which allow other businesses to promote goods and services on its platform.

It also gathers data from its single sign-on option Facebook Login, which enables users to sign into other websites, apps and services using their Facebook login details.

The CMA will investigate whether Facebook unfairly uses this data to benefit its own services. 

In particular, the watchdog will focus on its classified ads business Facebook Marketplace and Facebook Dating — the dating profile service it launched in Europe last year.

“We intend to thoroughly investigate Facebook’s use of data to assess whether its business practices are giving it an unfair advantage in the online dating and classified ad sectors,” said CMA chief executive Andrea Coscelli.

“Any such advantage can make it harder for competing firms to succeed, including new and smaller businesses, and may reduce customer choice.”

Facebook said both Marketplace and Dating operated in highly competitive environments and were relatively small players in their respective markets.

The Commission will also assess whether Facebook ties its Marketplace service to its social media network, in breach of EU rules.

“Facebook collects vast troves of data on the activities of users of its social network and beyond, enabling it to target specific customer groups,” said EU competition chief Margrethe Vestager.

“We will look in detail at whether this data gives Facebook an undue competitive advantage in particular in the online classified ads sector, where people buy and sell goods every day, and where Facebook also competes with companies from which it collects data. In today’s digital economy, data should not be used in ways that distort competition.”   

It marks the third investigation into suspected breach of competition law by tech giants launched by the CMA this year. Google is facing scrutiny over its plans to replace ad-tracking cookies, while Apple is under investigation for alleged abuse of its dominant position in the app market.

The crackdown comes as the CMA takes on new powers as the UK’s first internet regulator. Through its new Digital Markets Unit the watchdog has been tasked with curbing the growing power of Silicon Valley tech giants.

A Facebook spokesperson said: “We are always developing new and better services to meet evolving demand from people who use Facebook.

“Marketplace and Dating offer people more choices and both products operate in a highly competitive environment with many large incumbents. We will continue to cooperate fully with the investigations to demonstrate that they are without merit.”