After hearings by United States lawmakers, Facebook is now facing a probe in the European Union for its cryptocurrency project Libra.
According to a Bloomberg report, the European Commission is investigating the cryptocurrency initiative of the social media giant for “potential anti-competitive behavior.”
EU officials are concerned that Facebook can have an unfair advantage over its rivals in the payments space due to its massive existing global user base of 2.7 billion. The Menlo Park-headquartered company also has access to mountains of data of its users, which might create a “possible competition restrictions” in the industry.
A big plan with big resistances
Facebook announced its plans to launch a digital currency in June with which it is planning to bring financial access to the unbanked masses. The company formed a Libra Association based in Switzerland to oversee its crypto project.
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The plans of the social media company to jump into the payment industry also alarmed the regulators and lawmakers across the globe, most of which are hostile towards the project.
The EU is also concerned with the structure and membership of the Libra Association and is examining the possible integration of Libra-backed applications on platforms like Messenger and WhatsApp.
Facebook has already signed deals with 27 companies to be a part of the Libra Association and manage nodes for its upcoming cryptocurrency. However, one of the partners revealed that they only signed a non-binding agreement with the social media giant.
The California company is also facing a slew of resistance due to privacy concerns associated with its cryptocurrency project. It faced two consecutive hearings in the United States – one with the Senate and other in front of the House – but could not clarify some serious concerns raised by the lawmakers.
A group of global data regulators also teamed up to go after Facebook and asked the company to clarify a few concerns.