Facebook’s parent company, Meta, has provided key assurances to U.K. antitrust regulators in an effort to address concerns regarding the use of advertising data to benefit its own products. The move comes as Meta revealed its sale of GIF platform Giphy for $53 million, three years after acquiring it for $400 million, following a final divestment order issued by the Competition and Markets Authority (CMA) last October. Notably, the CMA recently blocked Microsoft’s bid to acquire Activision for $68.7 billion.
The core issue at hand revolves around how Meta leverages data from its social network to make content display and recommendation decisions on Facebook Marketplace, an online classifieds service introduced in 2016. By utilizing insights gathered from users’ ad interactions on Facebook, the CMA argues that Meta gains an unfair advantage by displaying more relevant items in users’ Marketplace feeds, potentially disadvantaging advertisers elsewhere on the platform.
Both the European Commission (EC) and the CMA launched separate but collaborative investigations into Meta’s practices in June 2021. In August, the CMA confirmed its formal investigation, 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 allowing advertisers to opt-out of their advertising data being used for the development of Facebook Marketplace. Meta plans to implement new technical systems to enable this opt-out feature and will train its staff to prevent the use of advertiser data when creating new products that could directly compete with advertisers in the U.K. market.
While the CMA has not formally accepted these commitments yet, it has expressed that it is likely to do so. If approved, a monitoring trustee will be appointed to ensure Meta’s compliance with these commitments.
The CMA’s director of enforcement, Michael Grenfell, stated in a report that “reducing the risk of Meta unfairly exploiting the data of businesses who advertise on its platform for its own competitive advantage could help many U.K. businesses who advertise there.” The CMA has initiated a month-long consultation period, closing on June 26, to gather feedback on these commitments. If the provisional findings are upheld, it will effectively bring the investigation to a close.
