The European Commission has penalized a $841 million (797.72 million euros) fine to Meta Platforms Inc (NASDAQ: META) for violating EU antitrust laws.
The penalty follows an investigation into Meta's conduct, which found that the company abused its dominant market position by linking its classified ads service, Facebook Marketplace, with its primary social media network, Facebook.
The practice forced users into automatic access to Facebook Marketplace, limiting competition by providing the service with an unfair advantage.
The Commission also identified that Meta imposed unfair trading conditions on competing online classified ad providers, leveraging data from Facebook and Instagram ads to benefit its Marketplace service.
The Commission concluded that Meta's actions breached Article 102 of the Treaty on the Functioning of the European Union (TFEU), prohibiting the abuse of a dominant market position.
The fine was determined based on the duration and gravity of the violations and the revenue generated by Facebook Marketplace. Meta must cease these practices immediately and avoid similar conduct in the future.
The investigation into Meta's business practices began in June 2021, with formal proceedings initiated by the European Commission. In December 2022, the Commission issued a Statement of Objections, to which Meta responded in June 2023.
Margrethe Vestager, Executive Vice President for Competition Policy, stated that Meta integrated Facebook Marketplace with its leading social media platform, Facebook, and set unfair trading conditions for rival online classified ad providers.
Vestager noted that these actions unfairly benefited Facebook Marketplace by giving it a significant advantage over competitors, which violates EU antitrust regulations. Meta is now required to halt these practices immediately.
Meta, in its response, said that they would appeal the decision. The company said they built the marketplace in response to consumer demand and that the European Commission's decision provides no evidence of competitive harm to rivals or any harm to consumers.
The U.S. Big Tech giants, including Meta Platforms, Microsoft Corp (NASDAQ: MSFT), Apple Inc (NASDAQ: AAPL), Google parent Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL), and Amazon.Com Inc (NASDAQ: AMZN), faced scrutiny and penalties from global antitrust regulators for allegedly crushing smaller players by exploiting their undue influence.
In October, Intel Corp (NASDAQ: INTC) won an EU court ruling, intercepting a 1.06 billion euros fine in a long-standing antitrust case over chip market dominance.
In September, Google won its appeal against the European Commission's 1.49 billion euros ($1.66 billion) antitrust fine for anticompetitive practices involving its online search advertising business.
Presidential elect Donald Trump discussed antitrust fines imposed on U.S. tech giants during his campaigns. He mentioned a conversation with Apple CEO Tim Cook, where Cook highlighted the financial impact of recent EU penalties on Apple.
According to Trump, Cook expressed concern over EU fines totaling $17 billion, including a $15 billion back tax payment and an additional $2 billion antitrust fine.
Trump assured Cook that if elected, he would not allow foreign regulators to exploit American companies, signaling his intent to oppose EU actions targeting U.S. tech firms.
Price Action: META stock is down 0.74% at $575.70 at the last check on Thursday.