Dutch Online Marketplace OLX Contributing to EU Antitrust Probe Into Meta

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Dutch online marketplace OLX is helping EU antitrust enforcers in their investigation into Facebook owner Meta Platforms (META.O), the Naspers unit said on Friday. The European Commission has accused Meta of gaining an unfair advantage by tying its classified advertisements service Marketplace with its social network Facebook and imposing unfair trading conditions on rival online classified ads services. The European Commission’s antitrust chief Margrethe Vestager has said the company could face a fine of up to 10 percent of its global turnover.

TechCrunch has previously reported that the EC is investigating Meta’s classified ads business and its use of advertiser data, mainly how it may unfairly use the data to compete with rivals in online classified advertising markets. Today’s announcement marks a formal step forward in the probe, with the European Commission issuing what’s known as a Statement of Objections to Meta. The statement notifies alleged offenders that the European Commission has formally launched an antitrust investigation and allows them to review documents and reply in writing to the EC’s claims. Meta will also be allowed to request a closed-door hearing with the EC’s antitrust experts and their counterparts from national competition watchdogs.

The EC’s main concern is that linking the two services imposes “unfair trading conditions” on competitors that do not advertise on Facebook or Instagram. The EC is also concerned that Meta is using data gleaned from competitors via their advertising on Facebook or Instagram to boost its own classified ads business, in breach of EU rules against abusing dominant market positions.

Earlier this year, the EC began an informal antitrust inquiry into Meta’s Marketplace service and related practices, and later this summer, it started a formal probe into the matter. According to the EC’s Statement of Objections, the broader investigation will consider whether the company infringes Article 102 of the Treaty on the Functioning of the European Union, which has provisions for companies violating antitrust law by distorting competition in the online classified advertisement markets.

Specifically, the EC looks at how the links between Facebook and Meta’s Marketplace create a situation where users of one service automatically have access to the other, making it easier to avoid such access. It also considers how the two services’ tethering affects competition in online classified ads markets, where Facebook’s and Meta’s services overlap.

The EC’s official statement is an essential first step in the case, and it will be some time before any decision is reached. As with other antitrust investigations, it will be up to the alleged offender to prove that their actions do not violate EU antitrust laws. For its part, Meta has vowed to defend itself vigorously and has taken steps to make it easier for competition watchdogs to understand its actions. The company works closely with OLX and other online marketplaces to ensure that its product innovations are pro-consumer and not anti-competitive.

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