Meta Platforms Inc. A fine of €798 million ($841 million or approximately Rs. was imposed. European Union regulators fined the US tech giant 7. 1 billion euros for linking its Facebook Marketplace service to the social network, marking the company’s inaugural penalty for violating EU antitrust laws.
The European Commission made a pioneering ruling, instructing Meta to discontinue linking its classified-ads service with Facebook’s extensive social media platform, and to avoid enforcing unjust trading conditions on competing second-hand goods platforms.
EU antitrust chief, Margrethe Vestager, stated that Meta connected its online classified ads platform, Facebook Marketplace, to its social network Facebook and placed unjust trading terms on other online classified ads providers. It did this in order to enhance its own service, Facebook Marketplace. The recent development contributes to a series of unfortunate events for Meta. On Wednesday, amidst Donald Trump’s re-election as US president, a judge in the US decided that the antitrust lawsuit filed by the Federal Trade Commission against the company would proceed to trial. His win significantly boosted Bluesky, a social networking app rivaling Meta’s Threads, to the top spot of Apple Inc. ‘s US App Store.
Only eight months ago, Trump referred to Facebook as an “enemy of the people” and insinuated that CEO Mark Zuckerberg should be imprisoned. The EU fine is expected to mark one of Vestager’s last actions as she is slated to step down from her position before the year is over. In the last ten years, she has established herself as one of Silicon Valley’s most formidable critics, imposing billions of euros in antitrust fines, with over €8 billion in penalties directed at Google.
The decision was made after investigating how Meta utilizes Facebook’s massive user base to outperform competitors. European Union regulators mentioned that Meta, headquartered in Menlo Park, California, also leveraged data from competing platforms that ran ads on Facebook to enhance its Marketplace offering.
Meta committed to challenging the decision in the courts of the bloc, a procedure that might span over several years. It was expressed that the penalty fails to acknowledge the dynamics of the flourishing European market and provides protection to well-established industry giants.
Meta’s shares experienced a decline of up to one percent as trading commenced in New York. The EU merger regulator previously imposed a €110 million fine on the company for inaccuracies in the information disclosed during its acquisition of messaging service WhatsApp in 2017.
Amazon. com Inc. Managed to avoid fines from the EU in a comparable situation in 2022, focusing on the United States. An ecommerce company has been accused of unlawfully using competitors’ sales data to gain an unfair advantage for its own products. Regulators have approved several proposals put forth by Amazon, one of which includes a commitment to refrain from utilizing private data of independent sellers on its platform for the sake of its own retail operations.
Other regulators have also set their sights on Facebook’s Marketplace. It resolved an investigation with the Competition and Markets Authority of the UK by accepting a series of concessions.
Meta disclosed a sales figure of $40. 6 billion (approximately Rs. 3,42,777 crore) for the quarter ending on September 30, marking a 19 percent increase from the previous year. Recently, Meta has focused on balancing significant investments in cutting-edge technologies such as artificial intelligence and virtual reality, all while striving to maintain growth in its core digital advertising operations.
Although the EU has the authority to impose fines worth 10 percent of a company’s global sales, in practice, the penalties are often lesser, considering the gravity of the accusations and the specific subsectors implicated. This situation has caused regulators to feel frustrated and has sparked a demand for stronger measures, such as additional structural solutions. Similar to the United States, the European Union has been considering the possibility of breaking up Alphabet Inc. ‘s Google in order to address worries about its dominance in adtech.
The Digital Markets Act enhances traditional antitrust regulations by imposing stringent boundaries on Silicon Valley companies. The European Commission has initiated investigations regarding the compliance of Google and Meta with the DMA, alongside Apple Inc. It is probable that it will soon be subjected to the bloc’s initial penalty for not complying with the regulations. This week, Meta presented adjustments to its approach in targeting users with advertisements on Facebook and Instagram to counterbalance a surge in the investigation.
