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European Commission probes Facebook’s Libra cryptocurrency for anticompetitive behavior
The European Commission, the executive branch of the European Union, is reportedly investigating Facebook Inc.’s Libra cryptocurrency project for anticompetitive behavior even before it has been launched.
The claim came via Bloomberg, which cited an EC document that states that the investigation is the result of concerns that Libra may create “possible competition restrictions” on the information that will be exchanged and the use of consumer data. The document is described as a “standard part of an early-stage EU inquiry to gather information.”
The anticompetitive concerns appear to relate to a belief by the EC that Libra-backed applications would be integrated exclusively into Facebook services, including WhatsApp and Messenger. The concern comes despite Facebook’s plan for Libra, and the Libra Foundation tasked with managing the digital currency, to be independent of the company. Already, many different companies are supporting it, notable among them Mastercard Inc., Visa Inc. and PayPal Holdings Inc.
The EC isn’t the first governmental body to express concern about Libra. Criticism of the proposed cryptocurrency started within 24 hours of its announcement and came from both sides of the U.S. political aisle.
There may be legitimate concerns given Facebook’s dominance in social networking and messaging — Facebook apps dominating download lists. But the criticism in the U.S. turned into a complete farce when Congressman Brad Sherman went as far as comparing Libra to the 9/11 terrorist attacks while pantomiming two planes crashing into the World Trade Center.
Whether Mark Zuckerberg is believed to be the reincarnated spirit of Osama Bin Laden or not, Libra isn’t the first stablecoin project. Binance, the world’s largest cryptocurrency exchange announced on Monday that it was establishing Venus, a direct rival to Libra complete with a call for others to join it in establishing new currency-linked stablecoins.
News of the EC probe may have moved Facebook shares slightly lower, according to Reuters, but the decline eased later in the day, down only 1.3%.
Photo: Pixabay
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