In particular, both regulators plan to investigate whether Facebook uses data from advertisers in order to compete with them in the classified ads markets.
The EC says that, following a a preliminary investigation, it has concerns that Facebook might make use of the data obtained from competing providers – be it from digital advertising services or its its single sign-on option – to help Facebook Marketplace outcompete them.
“Facebook collects vast troves of data on the activities of users of its social network and beyond, enabling it to target specific customer groups,” the European Commission’s competition head Margrethe Vestager said in a statement.
“We will look in detail at whether this data gives Facebook an undue competitive advantage in particular on 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.”
“Facebook could, for instance, receive precise information on users’ preferences from its competitors’ advertisement activities and use such data in order to adapt Facebook Marketplace,” it said.
MORE FOR YOU
The CMA also plans to probe Facebook Dating, a dating profile service the social network launched in Europe in 2020, on similar grounds.
Andrea Coscelli, chief executive of the CMA, said: “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.
“Any such advantage can make it harder for competing firms to succeed, including new and smaller businesses, and may reduce customer choice.”
Facebook said it will cooperate fully with both the EU and UK investigations “to demonstrate that they are without merit”, adding that “marketplace and dating offer people more choices, both products operate in highly competitive environment with many large incumbents”.