To avert more UK antitrust woes, Meta to limit how it uses ad data to boost Facebook Marketplace
Facebook's parent Meta has given key assurances to U.K. antitrust regulators as it looks to counter concerns over how it uses advertising data to benefit its own products.
The news comes in the same week as Meta revealed it was selling GIF platform Giphy for $53 million three years after buying it for $400 million, following a final divestment order issued by 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 specific issue is how Meta is able to leverage data from its core social network to make content display and recommendation decisions in Facebook Marketplace, an online classifieds service launched back in 2016 that allows Facebook users to buy and sell just about anything. Given that Meta can garner insights on users' interests through their online ad 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 collaborative efforts to investigate Meta on this practice in June 2021, with the CMA revealing back in August that it was proceeding with a formal investigation. The EC followed suit four months later.
Now, however, the CMA has given its first indication that it is prepared to drop the case after receiving specific commitments from Meta.
These include allowing advertisers to opt-out of their advertising data being used to develop Facebook Marketplace, which Meta said it will do through implementing "new technical systems." On top of that, Meta said it will train staff to ensure that they don't use advertiser data when developing new products for use in the U.K. market that may be in direction competition with advertisers.
While the CMA hasn't explicitly accepted these commitments yet, it has more or less said that it will do, and that if it is ultimately greenlighted then a monitoring trustee will be appointed to ensure that Meta adheres to its commitments.
"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's director of enforcement Michael Grenfell wrote in a report published today. "We are now consulting on these commitments which we believe, at this stage, will address our concerns."
This latest announcement kickstarts a month-long consultation period which will close on June 26. If its provisional findings are upheld, this will effectively end the investigation.