Facebook’s Libra cryptocurrency faces EU antitrust scrutiny

 

 

Social media behemoth Facebook’s plan to launch a cryptocurrency is subject to an antitrust probe by European Union regulators, Bloomberg reports, citing a document seen by the organisation.

The European Commission is “currently investigating potential anti-competitive behaviour” related to the Libra Association amid concerns the proposed payment system would unfairly shut out rivals, the report said.

EU officials said they were concerned about how Libra may create “possible competition restrictions” on the information that will be exchanged and the use of consumer data, according to Bloomberg.

The EU regulators are also examining the possible integration of Libra-backed applications into Facebook services such as WhatsApp and Messenger, said the report. Facebook and the Commission both declined to comment on the investigation.

Deep scepticism

Facebook’s plan has already been met with intense scepticism worldwide, not only from data protection activists but also from politicians and financial regulators.

Their scepticism is fuelled by the fear that widespread adoption of the new digital currency by the social media giant’s 2.38 billion users, more than the combined populations of the United States and China, could upend the financial system. It could create global currency authorities would neither control nor manage.

US lawmakers last month grilled the company on its ambitious plan to create a Libra-based financial ecosystem.

US Federal Reserve Chairman Jerome Powell, German Finance Minister Olaf Scholz and his French counterpart Bruno Le Maire have also spoken out against Libra.

Mark Carney, the Bank of England’s governor, said issues such as money laundering, terrorist financing controls and data protection needed to be addressed before Facebook can be allowed to launch its digital coin.

Facebook also faces increasing governmental scrutiny in the US over its privacy practices, including a record $5-billion (€4.5-billion) fine from the US Federal Trade Commission for mishandling user data. — Deutsche Welle

Srinivas Mazumdaru
Guest Author
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