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Meta agrees to fair use of customer data after competition watchdog action

Written by Tue 7 Nov 2023

The Competition and Markets Authority (CMA) has secured commitments from Meta to safeguard advertising customers’ data from exploitation.

The commitments include an opt-out option for Facebook Marketplace. Competitors of Facebook Marketplace can use Meta’s platforms to advertise their products and services. A new commitment gives Meta’s competitors the option to opt out of their advertising data being used by Meta to operate or improve Facebook Marketplace. This includes data showing user engagement and product or service preferences. 

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. This could then encourage Meta to target that user with its own Marketplace listings for trainers.

The fulfilment of this commitment will be executed through a technical system integrated into Facebook Marketplace, effectively blocking Meta from using this data.

Further limitations on Meta’s use of advertising data in product development are also included in the commitments. Meta will restrict its use of advertising data obtained from digital display advertising and business tool services that identify advertisers.

Meta is expected to publish a statement in its Code of Conduct prohibiting the use of such data for developing Meta products that compete with advertisers. This Code also outlines Meta’s standards and expectations for employee behaviour.

Meta also pledged to prevent its UK-based product development employees from using this information to enhance its products in competition with advertisers.

A monitoring trustee will be appointed, providing the CMA with reports on compliance and any failures to ensure that Meta acts in line with its commitments. The trustee will also oversee the implementation of new technical systems and employee training.  

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.

The CMA also announced that it has accepted commitments from Amazon regarding how it treats independent sellers using its Marketplace retail platform. This aligned with the CMA’s ongoing efforts to promote effective competition in the digital sector.

The Competition Markets Authority’s Investigation of Meta

The CMA launched an investigation into Meta in June 2021. The investigation aimed to assess whether Meta had secured an unfair advantage, especially in the online classified ads service sector.

The Authority was concerned about Meta’s potential use of specific advertising data collected from businesses using its advertising services. Meta could use this data to enhance its products, putting it in competition with those advertising customers.

Meta is the largest supplier of digital display advertising in the UK, earning £4 million ($4.8 billion) to £5 billion ($6.1 billion) from UK advertising in 2021 alone. Over 10 million advertisers use its services, the majority of which are small and medium-sized businesses.

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Written by Tue 7 Nov 2023

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