Meta fined €798 million by the EU for allegedly abusing its dominant position in classified advertising

According to Zhitong Finance APP, Meta (META.US) has been fined €798 million ($841 million) by EU regulators for bundling its Facebook Marketplace service with its vast social network, marking the first time this American tech giant has been penalized for violating EU antitrust laws. In a groundbreaking decision, the European Commission ordered Meta to stop bundling its classified advertising service Facebook Marketplace with its personal social network Facebook and to avoid imposing unfair trading conditions on competitors' second-hand goods platforms. EU antitrust chief Margrethe Vestager stated, "Meta bundled its online classified advertising service Facebook Marketplace with its personal social network Facebook and imposed unfair trading conditions on other online classified advertising service providers. It did this to benefit its own service Facebook Marketplace." This fine may be one of Vestager's last actions, as she will leave her position by the end of this year. Over the past decade, she has been one of Silicon Valley's most vocal critics, having imposed billions of euros in antitrust penalties on Google (GOOGL.US), including fines exceeding €8 billion. The decision was made after an investigation into how Meta leveraged Facebook's billions of users to crowd out competitors. EU regulators stated that Meta also used data from competitors' platforms advertising on Facebook to enhance its Marketplace service. Meta responded by stating that the company would appeal to the EU courts, a process that could take years. It claimed that the penalty "ignores the realities of a thriving European market" and "protects large existing companies." It is understood that Amazon (AMZN.US) avoided EU fines in a similar case in 2022, where the American e-commerce company was accused of exploiting competitors' sales data to unfairly favor its own products. Regulators accepted some of Amazon's proposals, including a commitment to stop using non-public data from independent sellers for its competitors' retail businesses on its marketplace. Facebook's Marketplace has also become a target for other regulators. After agreeing to a series of concessions, the company reached a settlement with the UK's Competition and Markets Authority. Meta's financial report shows that its quarterly sales for the period ending September 30 were $40.6 billion, a 19% year-on-year increase. In recent years, Meta has been striving to balance massive expenditures on technologies like artificial intelligence and virtual reality while still ensuring that its core digital advertising business continues to grow. While the EU can impose fines of up to 10% of global sales, its penalties are typically much smaller and take into account the severity of the allegations and the submarkets involved. This has led regulators to feel frustrated and call for tougher remedies, including more structural solutions. Like the U.S., the EU has been considering the potential breakup of Google to alleviate concerns about its dominance in advertising technology The new Digital Markets Act (DMA) consolidates traditional antitrust laws by imposing strict protections on Silicon Valley companies. The European Commission has launched investigations into Google and Meta to examine their compliance with the DMA, while Apple (AAPL.US) may soon face its first fine from the EU for failing to comply with the regulations. This week, Meta adjusted the way users are targeted for ads on Facebook and Instagram to offset the escalation of the investigation