REG - Competition and Mkts - CMA update: Meta ad data investigation

Meta PlatformsAnnouncement

26/05/2023 12:15

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RNS Number : 8317A  Competition and Markets Authority  26 May 2023

 

FRIDAY 26 MAY 2023

 

Meta offers to limit use of other businesses' ad data to address CMA concerns

·    If commitments are accepted, competing advertisers would be able to
opt out from their ad data being used by Meta in Facebook Marketplace

·    Other proposed changes include Meta limiting ad data being used in
product development in the UK

In response to competition concerns raised by the CMA, Meta has offered
commitments not to use competitors' advertising data for its Facebook
Marketplace online classified ad service. It will do this by implementing new
technical systems and training for staff.

In addition, under the proposed commitments, Meta will take steps to restrict
the use of ad data for development of other Meta products made available in
the UK in competition with advertisers.

The Competition and Markets Authority (CMA) launched a Competition Act
investigation in June 2021 into arrangements which appear to enable Meta to
use certain ad data from businesses using its advertising services to develop
and improve Meta's own products in competition with those advertising
customers. For example, data derived from users' engagement with ads on
Facebook could provide Meta with knowledge as to whether a user is interested
in a particular product such as trainers, which could then in turn feed into a
decision to show listings for shoes to that same user when it opens the
Facebook Marketplace tab.

The CMA's preliminary view is that the offer from Meta addresses its
competition concerns and the CMA is now consulting on the commitments put
forward before deciding whether to accept them.

The commitments include:

·    Limiting the use of ad data Meta has through digital display
advertising and business tool services, which identifies advertisers. This
includes Meta taking steps to ensure that employees working on product
development do not use such data to develop and improve Meta's products in the
UK in competition with advertisers

·    Meta publishing a clear public statement in its code of conduct,
which sets out the standards to which Meta holds itself and its expectations
for how Meta's employees should act, that such data should not be used to
develop or improve products, giving greater transparency and clarity for the
people and businesses that use Meta's advertising services

·    Meta offering advertisers the ability to opt out of their advertising
data being used to develop or improve Facebook Marketplace, and implementing
technical systems to prevent the use of data from advertisers who have opted
out

A monitoring trustee will be appointed to oversee the technical changes and
training. They will provide the CMA with reports on Meta's compliance and
report any failures.

Michael Grenfell, Executive Director of Enforcement at the CMA, said:

"Where we identify potential competition concerns about a company's practices
or conduct, we look to see how our powers can be best used to have a positive
impact on the market.

"Reducing the risk of Meta unfairly exploiting the data of businesses who
advertise on its platform for its own competitive advantage could help many UK
businesses who advertise there. We are now consulting on these commitments
which we believe, at this stage, will address our concerns."

Meta collects data from its digital advertising services, which enable
advertising to Meta's users of Facebook, Messenger and Instagram. Meta is by
far the largest supplier of digital display advertising in the UK, earning
£4-5 billion from UK advertising in 2021. Meta is seen by advertisers as an
important advertising channel because of its significant reach and
capabilities, including its extensive and granular source of data on users.
Globally, more than 200 million businesses use Meta's apps every month to
reach customers and grow. Meta has more than 10 million active advertisers
across its services, the majority of whom are small and medium-sized
businesses.

The CMA is now consulting on Meta's proposed commitments. If they are
accepted, this would avoid having to pursue a potentially lengthy
investigation and leads to earlier changes that would benefit businesses and
consumers. The CMA has not made any finding at this stage of the investigation
that competition law has been infringed.

The consultation is now open and will close on 26 June 2023. For more
information, visit the case page
(https://www.gov.uk/cma-cases/investigation-into-facebooks-use-of-data) .

Notes to editors

1.   Facebook Marketplace is a feature in the Facebook app and on desktops
and tablets that allows users to post or browse classified ads items for sale.

2.   The CMA opened its investigation in June 2021, having reasonable
grounds to suspect that Meta may have infringed the Chapter II prohibition of
the Competition Act 1998 (CA98). The Chapter II prohibition of CA98 prohibits
the abuse of a dominant position by one or more undertakings which may affect
trade within the UK or part of it.

3.   Formal acceptance of the commitments would result in the CMA not
continuing its investigation and not proceeding to a decision on whether the
CA98 has been infringed. Any decision by the CMA to accept binding commitments
will not include any statement as to whether or not Meta's conduct has
infringed the CA98.

4.   The commitments package is for a five-year period once changes are
implemented unless it is varied, substituted or released as provided for in
the commitments.

5.   This investigation uses the CMA's enforcement powers under the
Competition Act 1998. A Digital Markets Unit has also been established within
the CMA which, in future, will oversee a new regulatory regime for the most
powerful digital firms, promoting greater competition and innovation in these
markets and protecting consumers and businesses from unfair practices. Draft
legislation to give the Digital Markets Unit new powers is currently being
considered by the UK Parliament.

6.   The CMA's initial investigation also focused on data use in Facebook
Dating. However after conducting limited evidence-gathering in respect of
Facebook Dating, further evidence gathering in respect of Facebook Dating was
paused on administrative priority grounds. Meta's offer to limit ad data being
used in product development in the UK would apply to Facebook Dating.

7.   Media queries should be directed to press@cma.gov.uk
(mailto:press@cma.gov.uk) or 020 3738 6460.

 

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