CMA update: Meta ad data investigation

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.

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 [email protected] or 020 3738 6460.