Facebook cryptocurrency investigated by EU

Facebook’s new digital currency, Libra, is under early scrutiny from the EU’s antitrust regulators, according to two people familiar with the matter.

The European Commission has sent out questionnaires to groups involved with the Libra project as part of a preliminary information-gathering operation, amid concerns the currency could unfairly disadvantage rivals, the people confirmed.

Facebook and the commission both declined to comment on the investigation.

The social media company has drawn heavy criticism from regulators, central bankers and politicians since it announced plans to launch a low-cost digital currency alongside 27 other companies — including Visa, Mastercard, Uber and Spotify — by the end of next year. Each of the partners has pledged to invest $10m in the project. 

The social network also plans to integrate its own Libra-backed wallet, known as Calibra, into Facebook services such as WhatsApp and Messenger.

The commission is “currently investigating potential anti-competitive behaviour” after fears over “possible competition restrictions” relating to the use of consumer data, according to a document seen by Bloomberg on Tuesday. 

Facebook has come under fire from EU policymakers in the past two years over high-profile data privacy breaches such as the Cambridge Analytica scandal, the spread of online disinformation, electoral interference and terrorist content. However, the platform has not yet been the subject of an EU antitrust investigation.

So far, other regulators such as the international Financial Stability Board and the UK’s Financial Conduct Authority, as well as the Bank of England and the G7, have all said they will not allow the world’s largest social network to launch its planned digital currency without close scrutiny.

Data protection officials in the US, EU, UK, Australia and Canada have also raised concerns over the “privacy risks” of Facebook’s plans. 

The company is already facing broad antitrust probes in the US. In July, Facebook revealed that the US Federal Trade Commission had launched a formal antitrust investigation into the company. 

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