The EU is focusing the next stage of its competition probe into Facebook on whether the social media network is distorting the classified advertising market by promoting its free Marketplace service to its 2bn users.
Investigators have sent a 14-page questionnaire to competitors asking them to outline the effect that Facebook is having on their classified ads business. In Europe, German media group Axel Springer and Norway’s Schibsted are both rivals.
“Did the launch of Facebook Marketplace impact your online classified ads services business in each (European Economic Area) country in which you are present?” asks one of the questions.
Launched in 2016, Marketplace is Facebook’s version of the free US advertising site Craigslist. It allows Facebook users to buy and sell anything from sofas and barbecues to mobile phones and computer games.
On Facebook’s last earnings call in January, Sheryl Sandberg, its chief operating officer, said: “Marketplace is growing nicely. It’s now used by hundreds of millions of people every month. We also rolled out ads in Marketplace, which are available in 94 markets, which means advertisers can extend their News Feed ads to Marketplace. We’re seeing a lot of interest, especially with retail and auto advertisers. It’s very early, but we’re seeing good results.”
The latest questionnaire is at least the third that EU officials have sent out as they look to build a competition case against Facebook.
Investigators have continued to work on the Facebook case despite requests for a delay because of the coronavirus outbreak, and people with direct knowledge of the probe said that the EU was hoping to charge Facebook formally in the summer. They warned, however, that the timing could still slip. The EU is also investigating the social network’s Libra cryptocurrency over antitrust concerns.
Competitors have alleged the social network leverages its dominant position to push its services for free to users while taking advantage of the data it gathers from users and businesses using its platform.
“The EU is investigating the potential abuse of Facebook’s dominant position by tying Marketplace into the social network and the advantages that might give them,” said a person with direct knowledge of the probe.
A Facebook spokesperson said: “Compliance with competition rules and other legal requirements is a key consideration for Facebook as we develop our services and products. We stand ready to answer any questions the European Commission may have.”
Additional reporting by Hannah Murphy in San Francisco
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