Meta faces record-breaking fine after being accused of breaking EU rules

Fine for Facebook owner would smash previous European Union record of 4.125 billion euros

Meta’s logo can be seen on a sign at the company’s headquarters in Menlo Park, California, on 9 November, 2022 (Copyright 2022 The Associated Press. All rights reserved)

The European Union has accused Meta of breaking antitrust rules relating to its online classified ad business.

The Facebook owner faces a fine of up to 10 per cent of its annual global revenue if found guilty, which would be an $11.8 billion fine if applied to the firm’s latest financial results.

The EU’s executive commission said it “takes issue” with the tech company tying its online classified ad business, Facebook Marketplace, to Facebook.

That means Facebook users automatically have access to Marketplace “whether they want it or not”, the European Commission said.

The commission, the 27-nation bloc’s top competition enforcer, said Meta also imposes unfair trading conditions on competing online classified ad companies that advertise their services on Facebook or Instagram.

“The Commission takes issue with Meta tying its online classified ads service, Facebook Marketplace, to its personal social network, Facebook. The Commission is also concerned that Meta is imposing unfair trading conditions on Facebook Marketplace’s competitors for its own benefit,” the commission said in a statement on its preliminary view.

The sending of a statement of objections does not prejudge the outcome of an investigation, the commission said.

Meta didn’t respond immediately to a request for comment.

The EU’s competition watchdog and its British counterpart last year opened twin investigations into the company’s classified business.

If confirmed, the practices would be in breach of EU rules that prevent “abuse of a dominant market position.”

The commission said its preliminary finding is that Meta dominates the EU’s social network market as well as the online display advertising on social media in the bloc’s national markets.

Irish data regulators imposed a $275 million fine last month, bringing the total amount of fines against the tech giant to more than $900 million since last year.

Earlier this year, the EU fined Google a then-record 4.125 billion euros for breaking antitrust laws relating to its Android mobile operating system

Additional reporting by agencies