EU Antitrust Accusations Land Facebook in Hot Water

Shutterstock

Facebook is one of the most popular social media platforms in the world, enjoying a spot atop the heap of social apps. In that top spot, the company has found itself the object of scrutiny by regulators numerous times. Right now, Facebook CEO Mark Zuckerberg is facing the attention of European regulatory boards over two distinct antitrust accusations.

On Friday, both the United Kingdom and European Union announced separate inquiries into Facebook over what they described as antitrust activities. The behavior at issue is actually something that Facebook and companies like it have been engaging in for years: muscling into new territory with their existing size.

Data Collection

Opponents of Facebook have long argued that one of the reasons the social media giant is so popular is because they collect and sell user data. As such, Facebook’s opponents contend, “you are the product.” Using that information, advertisers are able to target much more individualized content at users on Facebook and elsewhere on the internet.

If you’ve ever felt like you started looking into information about a product and then started seeing ads for it, you could be seeing the results of targeted advertising. The European Commission’s inquiry into Facebook is concerned with both data collection and the company’s vast user base. The European regulatory board is concerned that Facebook’s decision to cross-promote their Marketplace to their social media users could run afoul of antitrust laws.

From Victory to Victory

After Google’s search engine became the most-used engine on the planet, the company created the Android operating system. From that system’s success, they built the Google Pixel phone. After Apple’s iPhone became the standard for smartphones, Apple was able to turn ApplePay into one of the most popular payment standards on the planet.

This is to say, Facebook’s approach of moving from strength to strength is not new. But, if the European Commission’s findings rule that it runs afoul of their regulations, it could mean big changes are in store for many tech companies.

Warping the Market?

The oversight board is inquiring into whether Facebook’s data collection, which allows them to target Facebook Marketplace ads at users, is giving the social media giant an unfair advantage over competitors like eBay. And, to make matters more complicated, Facebook also gathers data on its competitors.

In a statement on Friday, Facebook said that the investigations were without merit, and the company promised to fully cooperate in order to prove it. However, given the slow speed with which government organizations move, this inquiry is likely to take months or even years to reach any conclusions.