LONDON —
European Union and British regulators said Friday that
they were beginning separate antitrust inquiries into Facebook, broadening
their efforts to rein in the world’s largest technology companies.
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The investigations by the European Commission, the executive arm
of the 27-nation bloc, and Britain’s Competition and Markets Authority, take
aim at a key business strategy used by Facebook and other large tech companies:
to use their size and power in one area to enter others. Amazon took its
position as the largest online retailer to become a major player in video
streaming. Apple leveraged the iPhone to be one of the world’s largest mobile
payments with Apple Pay. Google parlayed its dominance as a search engine into
many different areas.
The regulators said they would start formal investigations of
Facebook Marketplace, an eBay-like service introduced in 2016 for users to buy
and sell products. Under scrutiny is whether Facebook’s cross-promotion of
Marketplace to the more than 2 billion users of its main social network gave
the company an unfair advantage over rivals in violation of European Union (EU)
competition laws.
Margrethe Vestager, the EU’s executive vice president in charge
of competition policy, said Friday that Facebook collects “vast troves of data”
on the activities of its users, “enabling it to target specific customer
groups.”
“We will look in detail at whether this data gives Facebook an
undue competitive advantage in particular on the online classified ads sector,”
she said in a statement, “where people buy and sell goods every day, and where
Facebook also competes with companies from which it collects data.”
“In today’s digital economy, data should not be used in ways
that distort competition,” she said.
In Britain, antitrust regulators are already investigating the
company’s advertising practices. On Friday, the competition regulator said it
was looking at Facebook Marketplace and Facebook Dating, a service introduced
in Europe last year. The British regulator said it would work with the European
Commission, though the investigations are independent of each other.
Facebook defended its business practices in a statement Friday.
“Marketplace and Dating offer people more choices and both
products operate in a highly competitive environment with many large
incumbents,” a representative of Facebook said. “We will continue to cooperate
fully with the investigations to demonstrate that they are without merit.”
The announcements are the beginning of formal investigations
that may take years to complete.
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