CMA protects competition by curbing Meta’s use of ad customers’ data
Following CMA action, Meta will no longer be able to use certain data obtained from competing businesses that advertise on its platforms to gain an unfair advantage.
The commitments secured by the Competition and Markets Authority (CMA) will prevent Meta from exploiting its advertising customers’ data, meaning businesses, and ultimately consumers, are protected. Without these measures in place, Meta risks having an unfair competitive advantage that could distort competition.
Competitors of Facebook Marketplace that use Meta’s platforms to advertise their products and services will now be able to opt out of certain parts of their ad data being used by Meta to improve its Marketplace.
As well as giving competitors more autonomy over their ad data, Meta has also pledged to limit how it uses ad data when developing its products. As a result, Meta cannot exploit advertising customers’ data to give itself an unfair advantage when competing with products or services sold by those advertising customers.
In June 2021, the CMA launched an investigation into whether Meta had gained an unfair advantage over competitors, particularly those which provide services for online classified ads, through how it gathers and uses certain advertising data.
Meta is by far the largest supplier of digital display advertising in the UK, earning £4-5 billion from UK advertising in 2021 alone. Over 10 million advertisers use its services, the majority of which are small and medium-sized businesses.
The CMA was concerned that Meta was able to use certain ad data gathered from businesses using its advertising services to develop and improve its own products in competition with those advertising customers. For example, data gathered from users’ interactions with third-party 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 encourage Meta to target that user with its own Marketplace listings for trainers.
The final commitments accepted by the CMA follow a robust investigation and consultation period. The commitments provided address the competition concerns identified by the CMA.
A full copy of the commitments can be found on the CMA’s website and include the following:
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Opt-out option for Marketplace: Meta’s advertising customers can ‘opt out’ of their relevant ad data being used by Meta to operate or improve Facebook Marketplace. This includes data that illustrates how users engage with their ads and can indicate to Meta which products or services a user is interested in. This commitment will be achieved via the implementation of a technical system for Facebook Marketplace to prevent Meta’s use of such data.
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Further limitations on Meta’s use of ad data in product development: Beyond Marketplace, Meta will limit its use of ad data derived from digital display advertising and business tool services, which identifies advertisers. It will issue a statement in its published Code of Conduct that states such data should not be used to develop Meta products that compete with those advertisers. The Code sets out the standards to which Meta holds itself and its expectations for how Meta’s employees should act. Meta also commits to taking the necessary steps to ensure its employees working on product development do not use such information to develop and improve Meta’s products in the UK in competition with advertisers.
To ensure that Meta acts in line with its commitments, a monitoring trustee will be appointed and will provide the CMA with reports on compliance and any failures. The trustee will also oversee the implementation of new technical systems and employee training.
The CMA also announced today that it has accepted commitments from Amazon regarding how it treats independent sellers using its Marketplace retail platform as part of the CMA’s ongoing action to ensure competition works effectively in the digital sector.
Notes to editors
- Media queries should be directed to [email protected] or 020 3738 6460.
- Facebook is owned by Meta. Facebook Marketplace is a feature in Meta’s Facebook app and on desktops and tablets that allows users to post or browse classified ads items for sale.
- The reference in paragraph 5 to Meta having over 10 million active advertisers using its services is taken from Meta’s website. The reference to Meta earning £4-5 billion from UK advertising was provided to the CMA by Meta.
- 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.
- Having carefully considered the representations it received from interested third parties in response to its notice of its intention to accept the commitments, the CMA decided to accept such commitments with a clarificatory addition to Clause 5.
- Having accepted the commitments, the CMA will not be continuing its investigation nor proceeding to a decision on whether the CA98 has been infringed.
- The commitments package is for a 5-year period once the required changes are implemented unless it is varied, substituted or released as provided for in the commitments.
- This investigation uses the CMA’s enforcement powers under CA98. A Digital Markets Unit has also been established within the CMA which, in future, is expected to 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. The legislation which will give the CMA these powers is currently being considered by the UK Parliament.
- The CMA’s initial investigation also focused on data use in Meta’s ‘Facebook Dating’ product and Meta’s use of data obtained from its single sign-on, Facebook Login. However, after conducting limited evidence-gathering in respect of Facebook Login data not provided for the purposes of advertising services and Facebook Dating, further evidence gathering 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.