Facebook’s Libra Project Is Being Probed by EU Officials: Reports

Facebook’s Libra project, already under fire from regulators around the world, is being probed by the European Union.

EU antitrust officials have sent questionnaires to Facebook’s partners in the project requesting details about it, according to reports.

“The Commission is in particular concerned about the possible competition restrictions that may result from the Association, especially with regard to information that will be exchanged and the use of consumer data,” the questionnaire states.

A Bloomberg report on the subject states that EU regulators are also investigating the governance structure and membership requirements for the Libra Association, the Switzerland-headquartered nonprofit that will govern the cryptocurrency and blockchain.  

Facebook has so far signed on 28 partners for the project, including payment processing behemoths Visa Inc. and Mastercard, and intends to increase that number to 100 by the time that the cryptocurrency launches next year. None of the existing partners provided comments to publications.

The Libra Association is currently being bankrolled by Facebook since other members are reported to have only signed a Letter of Intent (LOI). According to released details, the bar for membership to the association is high, starting with a $10 million investment.

A Problem Compounded by Facebook’s Reputation

The European Commission has a difficult reputation as far as dealing with technology companies is concerned. It was unsparing with Apple and Google while negotiating penalties for circumventing tax laws and breaking antitrust regulation.

In Facebook’s case, the problem is compounded by the social media network’s dubious reputation for privacy. Regulators across the world have expressed concern over the implications of mixing personal data, easily available to Facebook from its social media platform, with financial data, that could possibly be gleaned from the Libra blockchain and Facebook’s planned wallet Calibra.

For its part, Facebook has said that it will not launch until it has “fully addressed regulatory concerns”. But Libra chief David Marcus refused to commit to a moratorium on Libra development or a pilot of the blockchain and cryptocurrency under regulatory supervision during a Senate appearance last month.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.