EU fines Meta $840 million over classified ads business

The European Union hit Meta, the parent company of Facebook, with a $840 million fine this week over its classified advertisement business.

The European Commission, the European Union’s executive arm and chief antitrust regulator, imposed the fine of $840 million (797.72 million euro) on the company after a lengthy investigation concluded it abused its market dominance and engaged in anti-competitive practices.

The Accusations Against Meta

The commission alleged that Meta leveraged its dominance in social networking to gain an unfair advantage in online classified ads by linking Marketplace directly to Facebook, effectively exposing all Facebook users to Marketplace listings “whether they want it or not” and stifling competition from rival platforms.

Regulators also expressed concerns that Meta was exploiting its terms of service to establish unfair trading conditions, allowing the company to harness ad-related data from competing classified platforms advertising on Facebook or Instagram to bolster its own Marketplace platform.

Meta’s tactics granted it “advantages that other online classified ads service providers could not match,” said Margrethe Vestager, the European Commission’s executive vice president for competition policy, in a statement. “This is illegal under EU antitrust rules. Meta must now stop this behavior.”

The case originated in 2021, when regulators from the European Union and the United Kingdom launched parallel investigations into Meta’s classified ads business. The U.K. regulator concluded its probe last year after Meta agreed to certain concessions.

Meta Response

Meta pushed back in a statement, arguing that the ruling does not demonstrate any “competitive harm” to its rivals or to consumers and “ignores the realities of the thriving European market for online classified listing services.”

Meta argued that the commission’s case disregards that Facebook users have the option to “engage with Marketplace, and many don’t.” The company also pointed to the continued growth of online marketplaces, including global platforms like eBay, Europe-wide sites such as Vinted and various national services.

Meta stated that it would comply with the European Commission’s directive to halt the contested practices and refrain from repeating them, though the company also announced plans to appeal the decision.

Meta Political Ads

Meta previously issued a ban on political ads prior to the 2024 election, and it extended the ban for a few days after polls closed.

In an update earlier this month, Meta said that its restrictions on these ads would end on November 7, where they “will begin allowing new ads about social issues, elections and politics in the United States.”

This article includes reporting from The Associated Press.