The share prices for Meta Platforms have dipped in the latest trading session. The company’s shares dipped as European Union officials took a stance against the tech giant.
The officials at the European Union have alleged that the social media giant, which is also gaining prominence in the metaverse is in breach of antitrust rules.
Just as the officials issued a statement, the share prices for the tech company slumped tremendously in the latest trading session.
The European Commission is after Meta Platforms
The executive branch of the European Commission has issued a notification for the respective teams at Meta Platforms.
The European Commission has carried out its investigation and research on the entire matter before coming to the conclusion.
In their communication with the Meta Platforms, they have made them aware of their findings. However, they have clarified that these are the preliminary findings they have carried out.
As per the reports, it took the European Commission over 18 months to carry out their investigation and come up with a conclusion on the matter.
Allegation over Meta Platforms
The European Commission has shared the report of their findings with the Meta Platforms. In the report, they alleged that the company has been involved in distorting competition.
In order to attract more clients and online classified ads to their side, they have continued breaching the antitrust rules and have distorted the competition.
The European Commission has claimed that the company has been expanding its Facebook Marketplace to its entire social media network.
By doing this, it has been imposing trading conditions over its rivals that are completely unfair.
The European Commission has made it clear that if Meta Platforms were to be found in breaching the competition rules of the EU, they would face a major fine.
As communicated by the European Commission, the fine could account for Meta’s 10% revenues from a global level.
According to the analysts, the European Commission could have fined Meta up to $12 billion, if the year 2021 figures were taken into consideration.
The European Commission’s Fear
The European Commission has also shared its fear over the businesses and platforms that could’ve been Meta’s potential competitors.
The Commission alleged that the company could have put many competitors out of business already because it continued tying its Facebook Marketplace.
This could have resulted in many competitors finding themselves out of resources or funds to compete with Meta. Eventually, they might have closed down their businesses.
Due to the tying ability, Facebook Marketplace manages to gain a tremendous advantage in terms of distribution. It is something that the competitors cannot match and Meta benefits from that.
Apart from the above, Meta is also involved in imposing conditions on competing companies wanting to post their online classified ads through their platforms.
The unfair conditions they impose stop the ads services companies from posting their ads on platforms other than Instagram and Facebook.
With other competitors getting no ads from the major companies, they have no choice but to shut down their operations.
As per the European Commission, what Meta has been doing is disproportionate and unjustified. The platform has to stop doing this as soon as possible.
Meta Share Prices Experienced a Dip
In the latest trading session, the share prices for Meta experienced a major dip. The share prices for the company have dipped 3.8% in the latest trading session.
At the time of writing, Meta Platforms’ shares are trading at a low of $114.92 per share.
Meta is not the only tech giant operating in the west that has faced major action from the European Commission.
Other companies such as Alphabet, a parent company of Google, and Microsoft have also become targets to the regulators in the year 2022.
Alphabet actually got fined $4.3 billion by the European Commission over the breach of the antitrust rules.