Facing the prospect of a hefty fine, Meta, the parent company of Facebook, heads to a closed-door hearing today to refute European Union (EU) antitrust allegations.
The EU accuses the tech giant of leveraging its social network, Facebook, to give its classified advertisements service, Facebook Marketplace, an undue edge in the market.
Meta Stands Against Antitrust Charges
The EU commission sent an official statement of objections to Meta in December, highlighting two principal grievances. First, the EU contends that Meta unfairly ties its classified ads service to its overwhelmingly popular social network, Facebook.
This interconnection, according to the EU, equips Facebook Marketplace with an unmerited advantage in the competitive online classified ads sector.
Second, the EU denounces Meta’s alleged imposition of unjust trading conditions on competitor online classified ad services advertising on its platforms, Facebook and Instagram. The tech giant, which has declined to comment on the hearing, fervently denies these allegations.
High-ranking antitrust officials from the EU Commission and national watchdogs are set to attend the hearing to consider Meta’s rebuttal.
Tim Lamb, Meta’s legal representative, reaffirms the company’s commitment to cooperating with regulatory authorities, stressing that Meta’s product innovation promotes both consumer welfare and competition.
Potential Consequences and Market Expansion Uncertainty
Meta confronts the possibility of a penalty amounting to 10% of its global turnover, coupled with an injunction to amend its business practices, should it be found guilty of transgressing EU antitrust laws. Previously, insiders revealed to Reuters that Meta had attempted to negotiate a settlement.
This dispute unfolds as Meta launches its new app, Threads, in the US and the UK, while a release in the EU remains uncertain due to the bloc’s rigorous privacy laws.
The standalone app, which directly competes with Twitter, is currently unavailable in the EU. The region’s more stringent privacy requirements have previously posed challenges for Meta.
EU authorities have not obstructed Threads’ launch. Instead, Meta has chosen to delay its EU introduction due to uncertainty about compliance with the Digital Markets Act, the EU’s new competitive regulation that governs how dominant online platforms exert their market power.
Discussions are ongoing between the European Commission and companies like Meta regarding these regulations, with further guidance expected in September.
However, concerns linger over Threads’ ability to meet the EU’s strict privacy standards. Despite being a standalone app, Threads imports personal data from Instagram.
In the US version, users are informed that it gathers an extensive range of their data, such as health and financial details, browsing histories, location, purchases, contacts, search history, and sensitive information.
Meta has faced restrictions in the EU previously when it tried to launch advertising services on WhatsApp that used data from Facebook or Instagram. Given these challenges, it remains unclear whether Threads will adapt to the EU market or if it will ever launch in the continent.
As Meta heads into today’s hearing, the global tech community watches closely, waiting to see how the social media giant will maneuver through these multifaceted legal and regulatory challenges.
