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Facebook’s parent company, Meta, has issued significant assurances to UK antitrust regulators to address concerns about how it uses advertising data to benefit its own products.
The news comes the same week Meta revealed it sold GIF platform Giphy for $53 million, three years after buying it for $400 million, following a final divestment order from the Competition and Markets Authority (CMA) last October. The CMA also recently blocked Microsoft’s $68.7 billion bid for Activision.
At the heart of this particular issue is how Meta can use Meta data from its main social network to make content serving and recommendation decisions in Facebook Marketplace, an online advertising service launched in 2016 that allows Facebook users to buy and sell just about anything. . Since Meta can gain insight into users’ interests through their online advertising interactions on Facebook, the CMA argues that this gives Meta an unfair advantage by allowing it to display more relevant items in their users’ Marketplace feed – to the detriment of advertisers elsewhere on the platform.
The European Commission (EC) and the CMA announced separate but joint efforts to investigate Meta on this practice in June 2021, with the unveiling of the CMA back in August that it was conducting a formal investigation. The EC followed four months later.
Now, however, for the first time, the CMA has signaled its willingness to drop the case after receiving specific commitments from Meta.
These include allowing advertisers to ensure that their advertising data is not used to develop Facebook Marketplace, which Meta said it will do by implementing “new technical systems”. In addition, Meta said it will train staff to ensure they don’t use advertiser data when developing new products for use in the UK market that may be in competition with advertisers.
‘Reduce risk’
While the CMA has not yet explicitly accepted these commitments, it has more or less said it will, and that if it eventually gets the go-ahead, an oversight trustee will be appointed to ensure Meta adheres to its commitments.
“Reducing the risk of Meta unfairly exploiting the data of companies advertising on its platform for its own competitive advantage could help many UK companies advertising there,” Michael Grenfell, the CMA’s director of enforcement, wrote in a report published today. “We are now discussing these commitments which we believe will address our concerns at this stage.”
This latest announcement kicks off a one-month consultation period that will end on 26 June. If the preliminary findings are confirmed, the investigation will effectively be terminated.
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