Meta, the parent company of Facebook, has provided assurances to antitrust regulators in the UK regarding its use of advertising data to boost its products.
This development follows Meta’s recent decision to sell Giphy, a GIF platform acquired three years ago for $400 million, for $53 million due to a divestment order issued by the Competition and Markets Authority (CMA) in October. The CMA had also blocked Microsoft’s bid of $68.7 billion for Activision.
The central concern revolves around how Meta utilises data from its leading social network to make decisions about content display and recommendations on Facebook Marketplace, an online marketplace launched in 2016.
By leveraging insights on users’ interests gained through their interactions with online ads on Facebook, Meta is alleged to have an unfair advantage in displaying more relevant items on users’ Marketplace feeds, potentially disadvantaging other advertisers on the platform.
In June 2021, the European Commission (EC) and the CMA initiated separate but collaborative investigations into Meta’s practices. The CMA officially launched a formal investigation in August, followed by the EC four months later. However, the CMA has now indicated its willingness to drop the case after receiving specific commitments from Meta.
These commitments include enabling advertisers to opt out of their advertising data being used for the development of Facebook Marketplace—Meta plans to implement “new technical systems” to facilitate this. Additionally, Meta has stated that it will train its staff to refrain from using advertiser data when creating new products that may compete directly with advertisers in the UK market.
Although the CMA has not yet formally accepted these commitments, it has indicated its inclination to do so. If approved, a monitoring trustee will be appointed to ensure Meta’s compliance with the commitments. The CMA’s director of enforcement, Michael Grenfell, expressed the belief that reducing the risk of Meta exploiting advertiser data for its own advantage would benefit many businesses advertising on the platform.
The CMA is currently seeking feedback on these commitments during a month-long consultation period, which concludes on June 26. If the provisional findings are upheld, the investigation will effectively be concluded.