Facebook’s digital currency set for scrutiny by EU regulators
FACEBOOK looks set to undergo an investigation of its planned digital currency by European regulators amid fears it could exclude rivals.
Regulators are believed to have sent out questionnaires to groups involved with the project as part of an initial information-gathering exercise.
The European Commission is “in- vestigating potential anti-competitive behaviour” and the ability for Libra to monopolise payments and force rivals out of the market, according to a document seen by Bloomberg.
Officials said they were concerned that Libra could create “possible competition restrictions” on the information that will be exchanged and the use of consumer data.
They are also looking into the integration of Libra-backed applications into Facebook services such as Whatsapp and Messenger.
Facebook unveiled its ambitious plans to enter the financial sector in June, revealing cryptocurrency Libra as an alternative payment system.
It is the result of a secretive yearlong project within the social network and is by far the most heavily supported and well-resourced effort to take cryptocurrency and blockchain technology into the financial mainstream. Facebook wants people to borrow money, buy goods and pay bills using Libra, a major push into financial services from the company as it grapples with slowing growth, as well as investigations over its privacy record.
The currency is expected to launch in the first half of next year and has been backed by 27 other companies and organisations including Uber, Spotify, Mastercard, ebay and Vodafone.
Facebook also plans to release a wallet app, called Calibra, to buy and sell Libra. It will allow users to make payments across Facebook Messenger and Whatsapp.
However, there has been mounting criticism of Libra from different corners, with both politicians and bankers taking shots at the proposals.
Earlier this month, Elizabeth Denham, the Information Commissioner, warned that Facebook’s previous failings with user privacy should warrant concern about financial data being handled by the firm.
In June, French finance minister Bruno Le Maire called for Libra to be scrutinised by central banks, claiming it would be “out of the question” for it to become a sovereign currency.
Facebook has sought to ease concerns the push represents a new land grab, saying it would keep Calibra separate from the social network and would not use data for advertising purposes.