Facebook parent Meta has given key assurances to UK antitrust authorities to address concerns about how it uses advertising data to benefit its own products.
The news comes the same week that Meta announced it is selling GIF platform Giphy for $53 million, three years after its $400 million purchase, following a final divestment order last October from the competition and Market Authority (CMA) had been issued. The CMA also recently blocked Microsoft’s $68.7 billion bid for Activision.
Central to this particular issue is how Meta can use data from its core social network to make decisions about displaying content and recommendations on Facebook Marketplace, an online classifieds service launched in 2016 that allows Facebook users to everything to buy and sell . Because Meta can gain insights into user interests through its online advertising interactions on Facebook, the CMA argues that this gives Meta an unfair advantage by allowing it to display more relevant items in its users’ marketplace feed – to the detriment of advertisers elsewhere on the platform.
The European Commission (EC) and the CMA announced separate but joint efforts Meta will investigate this practice in June 2021, the CMA reveals already in August that a formal investigation has been launched. Four months later, the EC followed suit.
Now, however, the CMA has given early indications that it is ready to drop the case after receiving concrete assurances from Meta.
This includes the ability for advertisers to object to the use of their advertising data for the development of Facebook Marketplace, which Meta says it will achieve by implementing “new technical systems”. In addition, Meta announced it will train staff to ensure they do not use data from advertisers that may be in competition with advertisers when developing new products for use in the UK market.
“Reduce risk”
While the CMA has yet to explicitly accept these commitments, it has more or less said that it will, and that if ultimately given the green light, a monitoring trustee will be appointed to ensure Meta meets its commitments.
“Reducing the risk that Meta unfairly exploits the data of companies advertising on its platform for its own competitive advantage could help many UK companies advertising there,” said Michael Grenfell, director of enforcement at the CMA wrote in a report released today. “We are currently deliberating on these commitments, which we believe will address our concerns at this time.”
This latest announcement initiates a month-long consultation period ending on June 26th. If the preliminary results are confirmed, this will effectively end the investigation.
