The close ties between Facebook Marketplace and Facebook the social network are causing trouble for parent company Meta in Europe. The EU hit Meta with a complaint on Monday saying that the company's "abusive practices" were distorting competition in the classified ads industry.
Europe's Competition Commission issued a "statement of objections," which represents the preliminary findings of its investigation into Meta and its ad platform. It warned that the outcome was not looking good for the company, which could face a fine of up to 10% of its annual global turnover if confirmed and be forced to make changes to Facebook Marketplace.
The investigation, which was opened in June 2021, is trying to establish whether Meta's platform creates an unfair environment for the company's rivals, and in doing so denies people across Europe the opportunity to choose what platforms they're signed up to.
"Our preliminary concern is that Meta ties its dominant social network Facebook to its online classified ad services called Facebook Marketplace," said European Competition Commissioner Magrethe Vestager in a statement. "This means Facebook users have no choice but to have access to Facebook Marketplace." A secondary concern is that that Meta is imposing unfair trading conditions on Facebook Marketplace's competitors for its own benefit, she added.
Meta said on Monday that it disputed the EU's findings. "The claims made by the European Commission are without foundation," said Tim Lamb, Meta's head of EMEA Competition in a statement. "We will continue to work with regulatory authorities to demonstrate that our product innovation is pro-consumer and pro-competitive."
Meta will now have the opportunity to present its arguments to the EU in writing, as well as request a closed-door hearing with antitrust investigators before they reach a final decision.