Expert Insights

Expert Insights

UK and EU launch two-pronged attack into whether Facebook is abusing a dominant market position

On Friday 4 June 2021, the UK’s Competition and Markets Authority (CMA) and the EU’s European Commission simultaneously announced investigations into whether Facebook is abusing its dominant position in the social media and digital advertising markets through its collection and use of users’ data. While the two investigations will be carried out independently of each other, the CMA and the European Commission have said that they intend to work together closely as their respective investigations develop.

The user data in question includes data collected from Facebook’s digital advertising services, by which other businesses can advertise to Facebook users, and from its single sign-on option, by which users can use their Facebook login details to sign in to other website and apps.

The institutions will be investigating whether Facebook has unfairly and anti-competitively used the data collected through its digital advertising services to benefit its own services, namely Facebook Marketplace and Facebook Dating, to the detriment of competing firms, including many smaller and younger businesses, and of consumers, who are faced with reduced choice as a result of Facebook’s practices. The European Commission will also be investigating whether the link between Facebook’s social network and Facebook Marketplace is in breach of EU competition rules. Facebook has said that its Facebook Marketplace and Facebook Dating services both operate in highly competitive environments and that it will cooperate with the investigations in order to demonstrate that they are “without merit”.

The CMA’s and the European Commission’s alignment in their respective investigations indicates a shared approach by the two institutions in coming down hard on the dominance of Big Tech since the CMA became a regulator in its own right following the UK’s departure from the EU in January 2021 and since the establishment of the CMA’s Digital Markets Unit (DMU) in April, intended to oversee a “pro-competition” regime for Big Tech providers.

As well as this latest probe, the CMA is currently carrying out investigations into complaints that Google’s plans to disable third party cookies on its Chrome browser are anti-competitive and detrimental to news publishers and into accusations that the terms and conditions of Apple’s App Store are unfair and anti-competitive for app developers.

When viewed together, the recent establishment of the DMU and the CMA’s decision to launch concurrent investigations into Facebook, Google and Apple indicate that the UK, like many other countries, is sharpening its focus on the Silicon Valley tech giants and demonstrates that they are not deemed to be “too powerful” to be the subject of potential regulation and sanction by national governments. That the CMA is undertaking its investigation alongside the European Commission will be seen by many as a post-Brexit “united front” on the part of the UK and the EU against potential anti-competitive behaviour and the potential exploitation of users’ personal data in such a way as to distort competition in Facebook’s favour.

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