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EU ‘considering’ Facebook Libra competition probe

By Hannah McGrath

The EU’s antitrust regulators are weighing up a competition probe into Facebook’s Libra cryptocurrency, according to reports.

The European Commission’s competition watchdog has sent out a questionnaire to a number of those involved in the Libra project, according to Bloomberg, which first reported the potential probe.

The investigation would focus on Facebook’s use of consumer data in launching a digital wallet and virtual currency, and whether this use of consumer data presents anti-competition issues.

The EC is able to fine companies up to 10 per cent of global turnover, should they breach antitrust rules, with a $1.7 billion fine on Google’s advertising practices among recent examples.

Facebook announced its plans to launch the Libra cryptocurrency in June, prompting a backlash from regulators and policymakers concerned that its use for online payments could disrupt the global banking system and pose consumer protection issues.

Facebook plans to launch Libra in 2020, and has joined forces with 28 payments and technology firms to form the Geneva-based Libra Association, tasked with independent oversight of the digital currency.

The questionnaire seen by Bloomberg read: “The commission is in particular concerned about the possible competition restrictions that may result from the association, especially with regard to information that will be exchanged and the use of consumer data.”

An antitrust investigation before Libra’s planned launch in 2020 would represent a case of the EC taking preventative action to block potential breaches before the service is in wide circulation.

The digital wallet for Libra will be available in in Messenger, WhatsApp as a standalone app.

Since announcing its plans, Facebook has had to respond to fierce resistance from US regulators and lawmakers including president Donald Trump and Fed chairman Jerome Powell.

The company has suggested that it may postpone plans for a generalised rollout of Libra until regulators are satisfied that it meets security, data privacy and consumer protection standards.

Facebook declined to comment on the report.

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