The EU has slapped Meta with a £664million fine for engaging in abusive Facebook Marketplace practices.
The European Commission issued the penalty after its long-running investigation found the company abused its dominant position and engaged in anti-competitive behavior.
It said by tying Marketplace to its Facebook social media platform, users were regularly exposed to the classified ads service whether or not they wanted to be.
This gave the site a substantial distribution advantage which other classified ad platforms could not match.
The ruling also said the US tech giant had unilaterally imposed unfair trading conditions on other classified ads services providers who advertise on Metas platforms.
In addition to the fine, the EU Commission has ordered Meta to stop imposing these conditions on other services.
Its the first time the EU has imposed a penalty on the social media giant for breaches of the blocs competition law. Brussels has already slapped Big Tech rivals Google and Apple with billions in antitrust penalties.
Meta CEO Mark Zuckerberg makes a keynote speech at the Meta Connect annual event at the companys headquarters in Menlo Park, California, in September
The Commission said that while market dominance was in itself not illegal under EU antitrust rules, dominant companies have a special responsibility not to abuse their powerful market position by restricting competition.
Margrethe Vestager, executive vice-president of the Commission in charge of competition policy, said: Today we fine Meta 797.72 million euros for abusing its dominant positions in the markets for personal social network services and for online display advertising on social media platforms.
Meta tied its online classified ads service Facebook Marketplace to its personal social network Facebook and imposed unfair trading conditions on other online classified ads service providers.
It did so to benefit its own service Facebook Marketplace, thereby giving it advantages that other online classified ads service providers could not match. This is illegal under EU antitrust rules.
Meta must now stop this behaviour.
Meta has rejected the Commissions findings and said it would appeal but has agreed to comply with the ruling in the meantime.
The social media giant added that it would make announcements shortly to reassure our European users that Facebook Marketplace is here to stay.
In a lengthy statement on the ruling, Meta said on Thursday: Today, the European Commission announced a decision claiming that Facebook Marketplace has hindered competition for online marketplaces in Europe.
This decision ignores the realities of the thriving European market for online classified listing services and shields large incumbent companies from a new entrant, Facebook Marketplace, that meets consumer demand in innovative and convenient new ways.
Margrethe Vestager arrives for a College meeting at the EU headquarters in Brussels on October 30
We will appeal this decision to ensure that consumers are well served in the EU.
The firm argued that by creating Marketplace in 2016 and allowing users to buy and sell items for no charge, it had given consumers a new choice beyond the large incumbent online marketplaces that have dominated the landscape, and disputed the Commissions claim that tying Marketplace to Facebook was an illegal link.
The European Commissions decision claims that Meta imposes Facebook Marketplace on people who use Facebook in an illegal tie.
But that argument ignores the fact that Facebook users can choose whether or not to engage with Marketplace, and many dont. The reality is that people use Facebook Marketplace because they want to, not because they have to, Meta said.
While the European Commission could not find any evidence of harm to competitors, they claim the entry and expansion of Facebook Marketplace has the potential to hinder the growth of large incumbent online marketplaces in the EU instead.
But those very marketplaces are actually continuing to grow and dominate in the EU. Platforms like eBay, Leboncoin in France, Marktplaats in the Netherlands, Subito in Italy, Blocket in Sweden and Finn.no in Norway are formidable competitors and the market leader in many member states.
They have continued to report considerable commercial success, including strong financial results and growth, since Facebook Marketplace launched. Successful new entrants - such as Vinted - have also emerged and continue to grow and thrive in Europe.
It added: EU competition law is intended to protect the competitive process and consumers, not to preserve the established business positions of incumbent providers in the face of innovation.
Ironically, in the name of competition, this decision does just that at huge cost to consumers.
The case dates back to 2021, when European Union regulators and their counterparts in Britain opened dual investigations into the classified business. The British regulator wrapped up its investigation last year after Meta made concessions.
Meta continues to face EU scrutiny on other fronts, including investigations into whether Facebook and Instagram child safety and election integrity measures comply with the blocs digital rulebook.
Meta has previously been hit with a series of fines for breaches of the EUs stringent privacy laws, including a record 1.2 billion euro penalty last year.