Is Facebook Marketplace Anti-Competitive?

By Greg Collier

Meta, the parent company of Facebook, is once again under scrutiny as the European Union closes in on a potential fine for its alleged anti-competitive practices. The tech giant is accused of leveraging its dominant position in the social media market to link its Marketplace platform with Facebook, giving it an unfair advantage over rivals in the classified advertising market. While the EU’s decision could come soon, this case raises broader questions about whether the U.S. government should be more aggressive in investigating similar behavior from Meta.

The European Commission launched an investigation into Meta back in 2019, following complaints from competitors who alleged that the company was abusing its market power. In December 2022, regulators presented their findings, arguing that Meta was distorting competition in the online classified ads market by using data collected from businesses for free, then turning around and selling ads to users. If found guilty, Meta could face penalties of up to 10% of its global annual revenue, a figure that could reach billions.

Meta has consistently denied these allegations, stating that its practices are pro-consumer and competitive in nature. The company argues that its Facebook Marketplace, launched in 2016, operates in a highly competitive space with many other players, particularly in specialized sectors like fashion. However, EU regulators remain unconvinced, and a decision is expected in the coming weeks.

The question now is whether the U.S. government should also be taking a closer look at Meta for similar anti-competitive practices. In the past, U.S. regulators have been slower to act on such concerns compared to their European counterparts. While the UK’s Competition and Markets Authority recently closed a similar probe after Meta promised to curb certain data practices, the U.S. hasn’t yet launched a comparable investigation on Marketplace’s impact.

Given the global influence of Meta and the power it wields through both Facebook and Marketplace, there’s a strong case for U.S. regulators to consider whether the company’s business practices stifle competition. Linking services like Marketplace with Facebook gives Meta an enormous advantage in data collection, which it can use to dominate the market further. The fact that such data practices are under scrutiny abroad suggests that there could be merit in investigating these claims domestically as well.

The U.S. has increasingly looked at Big Tech companies for anti-competitive behavior in other sectors, but Meta’s Marketplace practices have so far escaped major scrutiny. As the EU moves forward with its case, it may set a precedent that could prompt U.S. regulators to follow suit, especially as public awareness grows about the potentially harmful effects of these practices on both consumers and competitors.