EU Fines Meta €798 Million for Antitrust Violations Linked to Facebook Marketplace, Google Can Be Next

The European Commission has imposed a €798 million ($841 million) fine on Meta for antitrust violations on Thursday, marking the first penalty of its kind for the U.S. tech giant.

The fine comes as a result of Meta's practice of tying its Facebook Marketplace service to its dominant social network, Facebook, and imposing unfair trading conditions on rival online classified ad service providers.

The European Commission accused Meta of leveraging its massive Facebook user base to give Facebook Marketplace an unfair advantage, a move that EU antitrust chief Margrethe Vestager described as illegal.

Meta tied its online classified ads service Facebook Marketplace to its personal social network Facebook and imposed unfair trading conditions on other online classified ads service providers, Vestager stated. It did so to benefit its own service Facebook Marketplace.

Meta has announced its intention to appeal the decision, arguing that the fine ignores the competitive realities of the European market and unfairly protects incumbent marketplaces from competition. The company emphasized that Facebook users can choose whether to engage with Marketplace, and many do not. Meta also pointed out that the European Commission's decision lacked evidence of harm to competitors or consumers.

The European Commission's decision requires Meta to stop tying Facebook Marketplace to its social network and to refrain from imposing unfair trading conditions on rival platforms. The ruling also comes amid broader regulatory efforts in the EU to curb the dominance of Big Tech. The recently enacted Digital Markets Act aims to impose stricter regulations on major tech firms to foster competition and support local startups.

Brussels officials have been aggressive in their antitrust probes against Big Tech, aiming to open markets for local startups. However, some observers anticipate that the new European Commission, set to start a new five-year term soon, might adopt a more conciliatory tone to avoid potential retaliation from the incoming Trump administration.

While the EU can impose fines of up to 10% of a company's global sales for antitrust violations, actual penalties are typically smaller and consider the severity of the allegations and the specific markets involved. This has led to frustration among regulators and calls for tougher measures, including more structural solutions. Both the EU and the US have considered potential breakups of dominant tech companies like Alphabet Inc.'s Google to address concerns over Adtech dominance.

The European Commission has initiated probes into Google and Meta to assess their compliance with the Digital Markets Act (DMA). Apple Inc. is also likely to face fines soon for failing to comply with these new regulations. This week, Meta proposed changes to how it targets users with ads on Facebook and Instagram to mitigate the escalation of the investigation.

As Meta prepares to appeal the EU's decision, the case highlights the ongoing tension between regulatory authorities and major tech companies over market dominance and competitive practices. The outcome of this and similar cases will likely shape the future landscape of digital markets and regulatory approaches in both Europe and the United States.