The U.K. Competition and Markets Authority (CMA) and the European Commission have launched probes into Facebook’s use of data for online classified ads and dating, and whether an unfair advantage is at play.
The social media giant collects data from its digital advertising services — which allow other businesses to advertise to Facebook users — and from its single sign-on option, Facebook Login, which offers people the ability to sign in to other websites, apps and services using their Facebook log-in details.
The CMA is investigating whether Facebook has unfairly used the data gained from its advertising and single sign-on to benefit its own services, especially Facebook Marketplace, where users and businesses can put up classified ads to sell items, and dating service Facebook Dating.
The CMA will work closely with the European Commission as the investigations develop.
Andrea Coscelli, chief executive of the CMA, said: “We intend to thoroughly investigate Facebook’s use of data to assess whether its business practices are giving it an unfair advantage in the online dating and classified ad sectors.
“Any such advantage can make it harder for competing firms to succeed, including new and smaller businesses, and may reduce customer choice,” said Coscelli. “We will be working closely with the European Commission as we each investigate these issues, as well as continuing our coordination with other agencies to tackle these global issues.”
Coscelli underlined that “no decision has yet been made on whether Facebook has broken the law.”
“Facebook is used by almost three billion people on a monthly basis and almost seven million firms advertise on Facebook in total. Facebook collects vast troves of data on the activities of users of its social network and beyond, enabling it to target specific customer groups,” said European Commission executive VP Margrethe Vestager, who is in charge of competition policy. “We will look in detail at whether this data gives Facebook an undue competitive advantage in particular on the online classified ads sector, 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,” Vestager added.
In April, the CMA set up regulator The Digital Markets Unit to “oversee plans to give consumers more choice and control over their data, promote online competition and crack down on unfair practices which can often leave businesses and consumers with less choice and more expensive goods and services.”
This is the third investigation into a suspected breach of competition law that the CMA has opened recently in digital markets. It is also investigating Google’s ‘privacy sandbox’ and Apple’s AppStore.