The European Union filed a complaint against Meta due to the close link between the company's social network service and its online shopping platform.
The news on Monday caused the stock to fall. The company's shares are down 65.63% year-to-date as the company faces continued hits over founder Mark Zuckerberg's $15 billion metaverse ambitions, as well as painful interest rate hikes that have beaten down tech stocks across the board.
"With its Facebook social network, Meta reaches billions of monthly users and millions of active advertisers around the world," the EU antitrust commissioner said. We are concerned that Meta ties its dominant social network Facebook to its online classified ad service called Facebook Marketplace.
Meta's head of competition for Europe, the Middle East and Africa told Insider that the claims made by the European Commission are not true. We will work with regulatory authorities to show that our product innovation is pro- consumer and pro-competitive.
The European Commission said that Meta could be fined up to 10% of its global revenue if it is found guilty. It's possible that the company could pay up to $11.8 billion.
A statement of objections is a formal step in an EU investigation.
In June 2021, the European Commission launched a probe into Meta.
Facebook users have no choice but to use the marketplace. Meta imposed unfair trading conditions that allowed it to use data on competing online classified ad services. Meta's practices would be illegal if confirmed.
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