Today, the European Commission announced a decision claiming that Facebook Marketplace has hindered competition for online marketplaces in Europe. This decision ignores the realities of the thriving European market for online classified listing services and shields large incumbent companies from a new entrant, Facebook Marketplace, that meets consumer demand in innovative and convenient new ways. We will appeal this decision to ensure that consumers are well served in the EU.
Facebook Marketplace Meets Consumer Demand
From the very beginning, people have bought and sold items on Facebook. When Facebook Marketplace first launched globally in 2016, people in the European Economic Area had organically created more than 400,000 groups focused on buying, selling or promoting goods on Facebook. We built Facebook Marketplace in 2016 to provide a more convenient and easy-to-use way for people to discover, buy, and sell items at no charge. In doing so, we provided European users with a new choice beyond the large incumbent online marketplaces that have dominated the landscape for a long time and continue to do so. In fact, the German competition regulator, the Bundeskartellamt, welcomed the “effective competition […] from newcomers such as… Facebook Marketplace” in a previous merger decision.
Half a Decade of Investigation but No Coherent Theory or Evidence of Harm
The European Commission’s decision claims that Meta imposes Facebook Marketplace on people who use Facebook in an illegal “tie.” But that argument ignores the fact that Facebook users can choose whether or not to engage with Marketplace, and many don’t. The reality is that people use Facebook Marketplace because they want to, not because they have to.
The decision also argues that Meta could use advertising data from rival marketplaces that advertise on Facebook to compete against them with Facebook Marketplace. But we don’t use advertisers’ data for this purpose and we have already built systems and controls to ensure that.
While the European Commission could not find any evidence of harm to competitors, they claim the entry and expansion of Facebook Marketplace has the potential to hinder the growth of large incumbent online marketplaces in the EU instead. But those very marketplaces are actually continuing to grow and dominate in the EU. Platforms like eBay, Leboncoin in France, Marktplaats in the Netherlands, Subito in Italy, Blocket in Sweden and Finn.no in Norway are formidable competitors and the market leader in many member states. They have continued to report considerable commercial success, including strong financial results and growth, since Facebook Marketplace launched. Successful new entrants — such as Vinted — have also emerged and continue to grow and thrive in Europe.
Ultimately, the European Commission appears to have ignored that empirical evidence. For the entire case to rest on a hypothetical potential to harm competition confirms that, at best, this is a case that is still searching for a coherent theory of harm.
Furthermore, the real problem is that this case entirely distorts competition law. EU competition law is intended to protect the competitive process and consumers, not to preserve the established business positions of incumbent providers in the face of innovation. Ironically, in the name of competition, this decision does just that at huge cost to consumers. It is disappointing that the Commission has chosen to take regulatory action against a free and innovative service built to meet consumer demand, particularly when senior European political figures are calling for the EU to be more competitive, innovative and forward-thinking.
What Happens Next?
We will appeal the decision. In the meantime, we will comply, and will work quickly and constructively to launch a solution which addresses the points raised. We aim to make announcements shortly to reassure our European users that Facebook Marketplace is here to stay.