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Facebook is under investigation for possible antitrust practices yet again, this time by European and U.K. officials who are investigating whether the company uses the data it collects from advertisers to maintain dominance in online advertising.
The U.K.’s Competition and Markets Authority (CMA) and Europe’s European Commission will both be looking into whether the social media giant is using its troves of data to monopolize and dominate the ad world. Although the investigations are separate, the European Commission said it will seek to work closely with the CMA, Law360 reports.
“Facebook collects vast troves of data on the activities of users of its social network and beyond, enabling it to target specific customer groups. In today’s digital economy, data should not be used in ways that distort competition,” European Commission Competition Head Margrethe Vestager said in a statement.
The CMA said it would investigate how Facebook uses the single sign-on system, whereby users can sign in to other sites including Instagram and Facebook Messenger with their Facebook login, to collect user data, Law360 reports.
The European Commission said it will look into the data collected from Facebook’s vast classifieds marketplace. In a statement, the regulator said: “When advertising their services on Facebook, companies, which also compete directly with Facebook, may provide it commercially valuable data. Facebook might then use this data in order to compete against the companies which provided it.”
Facebook has increasingly faced scrutiny over its market power and dominance. In the U.S., the company has attracted political attention for alleged anticompetitive practices and its growing power and influence, with some in Congress calling for the company, and other tech giants, to be broken up.
In 2020, Google, Amazon, Apple and Facebook were questioned by the House Judiciary Committee about their unmatched market power, with the committee later concluding the digital economy was “heavily impacted by monopoly power,” Law360 reports.
Facebook has faced a raft of civil class action lawsuits over alleged antitrust practices, including a February claim filed by a Wisconsin man alleging the social media monolith had acquired monopoly power in the social media market — and that it’s hurting its millions of consumers.
Do you think Facebook plays an outsize role in the digital economy? Let us know in the comments section!
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