European Union and British authorities opened dual antitrust investigations Friday into whether Facebook distorts competition in the classified advertising marketplace using data to compete against rival services.
German officials, meanwhile, launched a new evaluation of Google using awakened forces to scrutinize digital giants.
The multiple probes represent the latest escalation by European regulators in their battle to rein in the dominance of big American tech businesses. The focus of this EU and U.K. investigations highlights a longstanding concern that the data that the companies collect from people or companies with their platforms is utilized to get an edge over rivals, which could incorporate those very same businesses.
“Facebook collects vast troves of data on the actions of users of its social media and beyond, enabling it to target specific customer groups,” said Margrethe Vestager, the European Commission’s executive vice president responsible for competition policy. “We shall look in detail at if this information supplies Facebook an undue competitive edge, particularly on the online classified advertisements sector, where folks buy and sell goods daily, and where Facebook also competes with companies from which it collects data”
The U.K.’s Contest and Markets Authority stated in a simultaneous statement that it established its probe to test whether Facebook’s collection and use of data gave it an unfair advantage over rivals providing classified data and online relationship services.
Marketplace, Facebook’s classified ad service, and Facebook Dating”offer people more options and both products operate in a highly competitive environment that has many big incumbents,” the company said in an announcement.
The EU’s executive order, the bloc’s top antitrust enforcer, is looking at the possibility that Facebook collects data on what users are considering based on how rival classified advertising websites are advertising their own services to Facebook users. The commission is concerned Facebook then uses that data to tailor Marketplace to outcompete the rival websites.
It’s also looking at whether the method Marketplace is embedded to the social media gives Facebook an edge in reaching clients and shutting out competing sites, in violation of EU competition rules.
The U.K.’s competition watchdog is pursuing its own investigation, including examining whether data from Facebook Login was used. The feature lets users register into different websites, apps and services with their Facebook credentials, which makes it a potentially big source of info on consumers’ interests.
The EU and U.K. investigations could lead to formal charges, but it’s not a given. Regulators have the power to inflict penalties worth around 10 percent of a company’s annual revenue, which in Facebook’s case would amount to billions of dollars.
Also Friday, Germany’s competition watchdog, which has gained new powers to use on electronic firms , opened its most recent evaluation of Google. The Federal Cartel Office, or Bundeskartellamt, said it is examining whether Google’s News Showcase, a licensing platform for publishers started last fall, includes”unreasonable conditions” in contracts for information publishers.
The national office is also considering if search results give preference to publishers using the stage at the cost of others that have not been signed up.
Google denied giving preference to information partners and said it is cooperating with the German watchdog agency.
U.S. tech giants faced intensifying scrutiny in Europe within their business practices. Officials in Brussels have charged Apple with stifling competition in music streaming, accused Amazon of using info from independent merchants to compete against them with its own goods, and therefore are informally investigating Google’s information practices for advertising purposes.