CMA Investigates Facebook’s Use Of Ad Data

The Competition and Markets Authority has launched a probe into whether Facebook has gained an unfair advantage over competitors in providing services for online classified ads and online dating, through how it gathers and uses certain data.

The firm collects data from its digital advertising services, which allow other businesses to advertise to Facebook users, and from its single sign-on option, Facebook Login, which offers people the ability to sign into other websites, apps and services using their Facebook log-in details.

The CMA said it will look into whether Facebook has unfairly used the data gained from its advertising and single sign-on to benefit its own services, in particular Facebook Marketplace – where users and businesses can put up classified ads to sell items – and Facebook Dating – a dating profile service it launched in Europe in 2020.

The European Commission has today also launched its own investigation into Facebook’s use of data. The CMA will seek to work closely with the European Commission as the independent investigations develop.

Andrea Coscelli, CMA chief executive, said: “We intend to thoroughly investigate Facebook’s use of data to assess whether its business practices are giving it an unfair advantage in the online dating and classified ad sectors.

“Any such advantage can make it harder for competing firms to succeed, including new and smaller businesses, and may reduce customer choice. We will be working closely with the European Commission as we each investigate these issues, as well as continuing our coordination with other agencies to tackle these global issues.”

Executive Vice-President Margrethe Vestager said: “Facebook is used by almost three billion people on a monthly basis and almost seven million firms advertise on Facebook in total. Facebook collects vast troves of data on the activities of users of its social network and beyond, enabling it to target specific customer groups.

“We will look in detail at whether this data gives Facebook an undue competitive advantage in particular on the online classified ads sector, where people buy and sell goods every day, and where Facebook also competes with companies from which it collects data. In today’s digital economy, data should not be used in ways that distort competition.”   

As this is only the start of the CMA’s investigation, no decision has yet been made on whether Facebook has broken the law.

The CMA launched the Digital Markets Unit in April. Separately from this new investigation into Facebook’s use of advertising market data, the DMU has begun looking at how codes of conduct could work in practice to govern the relationship between digital platforms and groups, such as small businesses, which rely on these platforms to reach potential customers.

The DMU is operating in “shadow” non-statutory form, pending legislation that will provide it with its full powers. Ahead of this, the CMA will continue its work promoting competition and the interests of consumers in digital markets, including taking enforcement action where necessary.

This is the third investigation into a suspected breach of competition law the CMA has opened recently in digital markets. It is also investigating Google’s “privacy sandbox” and Apple’s AppStore.

Meanwhile, Bloomberg reported that Google has agreed to pay 220 million euros ($268 million) and change the way its business works across the world after settling a France probe that struck at the heart of its power over online advertising.