(Bloomberg) -- Meta Platforms Inc. is facing its first European Union fine over allegations it abused its dominance in the classified ad market by tying Facebook Marketplace to its social network.
As part of the upcoming EU order — set to be issued in the coming months — European Commission regulators could also tell Facebook that it’ll have to create a separate version of its classified ads platform, according to people familiar with the matter. This would allow users to log into Facebook Marketplace without having to go through the social media platform.
The EU’s antitrust enforcers are also preparing to leverage new powers under its Digital Markets Act to force Facebook to stop using data from rival ads platforms to compete against them, the people added who asked not to be identified because the matter is private.
They said that the decision was still in draft form, and could change ahead of a likely decision date this fall.
Meta runs the risk of a potential fine of as much as 10% of its annual sales — although EU penalties seldom reach that level. The prospect of the fine was earlier reported by Reuters.
A spokesperson from Meta said that the claims made by the commission are without foundation, but the organization continues to work constructively with regulators over the issue. An EU spokesperson declined to comment.
As part of a formal warning in December 2022, EU watchdogs alleged that Meta imposed unfair trading terms that enabled it to use data on competing online classified ad services for its Marketplace platform.
Facebook Marketplace has also been targeted by other regulators, including the UK’s Competition and Markets Authority, which earlier accepted a slate of concessions.
(Updates with Meta comment in the fifth paragraph.)
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