Social media company Facebook is facing antitrust investigations from EU regulators on a wide range of practices. The regulators are checking whether Facebook uses its size to hurt smaller rivals.
The European Commission is concerned
According to two people familiar with the matter, the European Commission has sent questionnaires to competitors and customers of Facebook to understand its practices. The companies have to respond to these questionnaires by next week. The two sources, on the condition of anonymity, also noted that Facebook’s sales platforms and its use and sharing of data collected via apps are also being investigated.
The European Commission has declined to comment on the probe, and Facebook also stayed tight-lipped. The issue was raised last year by European Union’s antitrust chief Margrethe Vestager. She said that she was interested in leaked emails from Facebook. These emails included a threat to stop data access to potential rivals for the company.
Apart from Facebook, the EU is also looking into Amazon’s business practices, especially how it collects data from retailers to check if the company is playing fairly. Google’s parent Alphabet and Apple are also facing antitrust complaints about their treatment of competitors.
EU’s interest in Facebook
The social media company has rubbed shoulders with lawmakers both in the US and the EU. However, The EU has been keener on investigating the firm, especially after the Cambridge Analytica scandal was revealed. The company is also facing privacy probes over data breaches and privacy issues. The EU has already fined the company for its failure to provide accurate information to the regulators during the review of its WhatsApp takeover. The investigation could take a new turn as Vestager will vacate office this year.
The company earned the wrath of European lawmakers last month when it announced the launch of its cryptocurrency called Libra. The cryptocurrency will be backed by government securities and will be the foundation of the company’s payments ecosystem. Given Facebook’s influence and its reach, the currency could be the biggest push to crypto coins ever.
However, regulators are worried about its impact on the global financial system, given the sheer size of its user base. European lawmakers have called out the company for its new project while US lawmakers have requested the company to halt work on Libra till they investigate its impact. Facebook will have two back-to-back hearings with the lawmakers on July 16 and 17 to discuss the crypto coin.