Facebook has once again found itself in hot water. This is because European Union and the United Kingdom have launched an investigation against key business strategies adopted by it. The investigation will probe whether the social media giant is benefitted from the use of data in online advertising. The social media giant may face a hefty fine after the investigation. It may be forced to make some major changes in its business model. It is well known that the business model of Facebook is already facing a lawsuit by filed by the government of the United States. European Union issued a statement stating that it is looking whether the social media giant breached the competition rules.
European Competition Commissioner has launched various investigations into some of the big tech companies of the United States. Margrethe Vestager said that data collected by advertisers must not be used to distort competition. “We will access all the information in detail. On this platform, people purchase and sell goods every day. Facebook is competing with companies on the platform from which it collects data,” she said. European Commission has already proposed legislation in this regard. According to the legislation, that was proposed in December, the Commission would have sweeping powers to take on the tech giants of America. Vestager said that data should not be used to distort competition.
The UK Competition and Markets Authority is also looking into the matter. It is investigating how Facebook could have benefitted by the use of data. “The CMA is looking whether Facebook used data to benefit its own services.” Facebook Marketplace is the platform that allows people to sell new and second hand items. Experts believe that any such advantage would reduce the competition. They feel that this can even reduce choices for customers. This is the third such investigation launched by the CMA. It is already investigating a suspected breach of competition law by Google and Apple. Commenting on the development, Facebook said it will fully cooperate with the investigations. “We will cooperate and prove that these claims are without merit.” There are 7 million companies that advertise with Facebook. The company said it is doing everything to offer people more choices.