EU authorities have imposed a substantial penalty of 797.72 million euros on a prominent technology firm for breaching antitrust regulations. This decision stems from the company’s practice of linking its online classifieds platform to its social network, thereby creating unfair trading conditions for other online classified ad providers.
Grounds for Violation
The company in question is a multinational technology enterprise with a prominent social networking platform. Additionally, it operates an online classified advertising service that enables users to buy and sell products. The investigation conducted by the authorities led to the conclusion that this company holds a dominant position in the personal social media market and the online advertising market on social media platforms.
The investigation further revealed that the company abused its dominant position by:
- Integrating its online classifieds service with its social network, thereby granting its users automatic and mandatory access to the classifieds platform.
- Unilaterally imposing unfair trading conditions on other online classified advertising service providers who advertise on its platforms. This allowed the company to utilize ad-related data generated by other advertisers exclusively for the benefit of its classifieds service.
Remedial Action Required
The regulatory body has ordered the company to cease its infringing conduct and refrain from engaging in any similar activities in the future. The imposed fine of 797.72 million euros was determined based on the duration and gravity of the infringement, as well as the company’s business volume and total turnover.
Stringent Monitoring by the European Union
In June 2021, the European Commission initiated a formal investigation into the company’s potential anti-competitive conduct. Subsequently, in December 2022, the Commission issued a statement of objections to the company, to which it responded in June 2023. The EU antitrust rules prohibit abuse of a dominant position in the market. Although holding a dominant position is not inherently illegal, such companies have a special responsibility to refrain from abusing their powerful position in the market.
Fines imposed on companies that fail to comply with EU antitrust rules are directed towards the EU’s general budget, ultimately contributing to the reduction of the financial burden on taxpayers.