An investigation opened in Europe against Facebook on the use of advertising data. – Wang Jianfeng / Costfoto / Sipa US / SIPA
The social media giant in the sights of the European Union. The European Commission on Friday opened an investigation against Facebook to determine whether the group violated EU competition rules in the use of advertising data. Brussels wants to establish whether the group has used advertising data, in particular collected from advertisers on its platforms, in order to compete with them in markets where Facebook is present.
At the same time, the British Competition Authority (CMA) on the same day opened an investigation into the network for “abuse of a dominant position” in digital advertising markets. In a statement, the CMA said it wants to determine whether Facebook has gained “an unfair competitive advantage over its competitors in online advertising and online dating services, through the way it collects and uses certain data.”
A wealth of data to target specific customer groups
As part of its investigation, the Commission is also investigating whether its online ad service “Facebook Marketplace” is linked to its social network in violation of European rules. Facebook “collects a wealth of data on user activity on its social network and beyond, allowing it to target specific customer groups. We will examine in detail whether this data gives Facebook an unfair competitive advantage, in particular in the area of online ads, ”European Competition Commissioner Margrethe Vestager said in a statement.
When advertising their services on Facebook, companies that are also in direct competition with Facebook can provide it with commercially valuable data. Facebook could then use that data to compete with the companies that provided it.
7 million businesses advertise on Facebook
Almost 3 billion people use Facebook each month, and a total of nearly 7 million businesses advertise their services on Facebook, Vestager recalled.
However, the American giant is “in competition with companies from which it collects data” on the classifieds market, underlined the Danish commissioner. This “data cannot be used in a way that distorts competition,” she said.