EU Eyes Formal Antitrust Investigation Into Facebook
By Sam Schechner
The European Union is close to opening its first formal
antitrust investigation into Facebook Inc., according to a person
familiar with the matter, ramping up its competition enforcement of
big tech companies.
The EU's top competition watchdog, the European Commission, is
likely in coming weeks to open formal antitrust proceedings against
Facebook, a key procedural step in one of its long-running
investigations into the company, the person said, adding that the
timing could still change.
The probe, which stems from complaints from competitors, looks
at least in part at how Facebook allegedly favors Marketplace --
its own flea market service where users can hawk their wares, from
used clothes to used cars -- at the expense of other companies that
sell products through Facebook.
A European Commission spokeswoman declined to comment on the
A Facebook spokesman also declined to comment. The company has
in the past said that it complies with antitrust laws.
The Commission's move toward a formal probe was first reported
by the Financial Times.
A formal investigation into Facebook would be the Commission's
first into the company on antitrust grounds. The EU fined the
company EUR110 million in 2017 for providing misleading information
during the review of its WhatsApp acquisition.
Facebook has been under investigation by the European Commission
for more than a year on multiple fronts, including allegations by
rival companies and politicians that Facebook has leveraged access
to its users' data to stifle competition, rewarding partners and
cutting off rivals. Facebook and the Commission have squabbled over
access to internal documents as part of those investigations.
Facebook has said that it works in a competitive landscape and
that competition enforcers must recognize that use of data is a
more complicated concept than control of a finite resource.
The opening of a formal investigation is a procedural step in an
EU antitrust case that can come after sometimes years of informal
investigations and questionnaires to competitors and companies. If
the Commission finds evidence of wrongdoing, it can then file
formal charges in what is called a statement of objections.
The Commission's Facebook inquiry is part of a new wave of
antitrust enforcement for the bloc. The Commission filed formal
charges last month against Apple Inc. for allegedly abusing its
control over the distribution of music-streaming apps, including
Spotify. In November, it filed formal charges against Amazon.com
Inc. for allegedly using nonpublic data it gathers from third-party
sellers to unfairly compete against them. Both companies denied
The EU is also pursuing informal antitrust investigations into
Alphabet Inc.'s Google related to both advertising and its use of
data, according to people familiar with the matter. Google has also
said it complies with competition laws.
At the same time, Margrethe Vestager, who leads the European
Commission's antitrust enforcement, has proposed a bill aimed at
helping new tech rivals challenge big tech companies without
relying on traditional, lengthy competition investigations.
The bill, dubbed the Digital Markets Act, could force digital
platforms designated as gatekeepers to refrain from some
potentially anticompetitive actions, such as promoting their own
products over those of competitors. Companies that violate those
rules could face fines of up to 10% of their annual revenue.
Write to Sam Schechner at email@example.com
--Daniel Michaels contributed to this article.
(END) Dow Jones Newswires
May 26, 2021 10:59 ET (14:59 GMT)
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