The UK Competition and Markets Authority (“CMA”) announced on 3 November 2023 the final Commitments agreed with Meta, the owner of Facebook, regarding its use of advertising data. This is in response to the CMA’s investigation into Meta’s use of data derived from its digital display advertising (“DDA”) services being used for purposes beyond the provision of such DDA services to develop and improve other Meta products.
The Commitments will prevent Meta from exploiting advertising users’ data via the functioning of its Facebook Marketplace. They are not an acceptance by Meta that there has been an infringement of the Competition Act 1998 nor that Meta has a dominant position in any relevant market.
On the same day, the CMA also agreed commitments with Amazon for its practices on its marketplace (using third-party sellers’ data to copy products).
The CMA’s Investigation into Meta
The CMA began its investigation into Meta’s practices in 2021 following its market study into online platforms and digital advertising. DDA services are a form of advertising where advertisers pay digital platforms to display ads (including video and non-video advertising) on web pages and mobile apps. Meta provides DDA services on various platforms such as its own social media platforms (Facebook Blue, Instagram and WhatsApp) and third parties’ via Meta Audience Network. Facebook Blue includes various functions such as Reels, Groups, Facebook Marketplace, etc.
The CMA found concerns over Meta abusing its dominant position in such DDA services by imposing unfair trading terms and conditions on users of such DDA services to enable its ability of using data from competitors of Facebook Marketplace to develop and improve Meta’s own Facebook Marketplace product. This conduct was seen to give Meta an unfair competitive advantage that it would not have otherwise obtained if it competed on the merits.
Meta’s Commitments to the CMA
The CMA consulted with Meta and other third parties resulting in Meta offering a set of Commitments to address the CMA’s concerns. The Commitments include:
- Using all reasonable endeavours to ensure that certain advertising data is not used to develop or improve Meta protects in competition with specific products. Meta will amend its publicly available Code of Conduct to reflect the Commitments and will commit to organising mandatory annual training and signature of personal acknowledgements and agreements for relevant employees.
- Setting technical controls to prevent competitor advertising data from being used in data assets managed by Facebook Marketplace employees. This will include competitors that advertise on Meta platforms having an “opt out” option from allowing Meta use of their advertising data.
Meta will appoint an independent monitoring trustee to monitor Meta’s compliance with the Commitments and shall provide detailed reports of its compliance. The Commitments have various implementation periods but will terminate upon the CMA’s notice of such termination or the imposition of obligations pursuant to the proposed Digital Markets Competition and Consumer Bill (still at Report stage in the House of Commons). Please see Preiskel’s previous blogpost comment on the Bill here.
Could this also be found to be an issue under the EU’s Digital Markets Act 2022 (“DMA”)?
The Commission is already formally investigating Meta’s conduct in Facebook Marketplace in its case opened in 2021 (see Case AT.40684). However, the DMA (having come into force on 1 November 2022) imposes certain duties on digital gatekeepers with respect to their core platform services. Meta is one of the six designated gatekeepers with its ads (Meta Ads), social network (Facebook) and intermediation service (Facebook Marketplace) constituting as the relevant core platform services. DMA duties involve restrictions on combining personal data from multiple sources and obligations on data transparency, which could mean Meta may be found in breach of its duties under the DMA.
Please contact Tim Cowen if you have any questions regarding the above.
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