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Facebook’s cryptocurrency reportedly facing ‘antitrust’ probe from the EU

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Facebook’s Libra under EU scrutiny

Facebook’s two-month-old Libra is reportedly facing an anti-trust probe by European Union regulators.

Citing a document seen by Bloomberg, the report indicates that the European Commission is “currently investigating potential anti-competitive behaviors” associated with the Libra Association.

The EU officials are concerned that Facebook proposed payment platform will create “possible competition restrictions” in the payment space. With Facebook’s current user base of 2.7 billion across the globe, concerns are high that Libra will easily oust competitors.

The governance structure of the Libra Association also came under scrutiny. Facebook’s Libra association is set to be “an independent not-for-profit” organization that will oversee the Libra network. However, the EU is concerned about the organization’s structure and membership.

Data protection concerns

Apart from concerns about Libras potential for “anti-competitive behaviors” the European regulators are also investigating Libra’s use of user data.

The regulators will scrutinize Libra’s integration into other facebook services like Messenger and WhatsApp.

There was no comment from either facebook or the commission on the matter.

However, a spokesman for the commission’s financial services department is quoted by Bloomberg saying that other EU regulators are “monitoring market developments in the area of crypto assets and payment services including Libra and its development”.

Since its launch, Facebook’s Libra project has faced a lot of scrutiny from world regulators. In the US, lawmakers have called upon Facebook and its associates to temporarily stop any further development until the project’s potential impact is assessed.

So far, the California based company has faced two consecutive hearing in the US. The lawmakers raised serious concerns including data privacy that the company is yet to clarify.

Libra’s bizarre management structure                  

While announcing the Libra launch, facebook promised to satisfy the demands of all regulators before launching Libra.

If all goes according to plan, Libra will be a global cryptocurrency that can be bought and sold through a digital wallet called Calibra. At its core, Libra is Facebooks attempt to re-invent and improve Bitcoin.

However, unlike Bitcoin, Libra will be governed by a conglomerate of companies including PayPal, Visa, and MasterCard.

The Libra association is based in Switzerland and Facebook claims that the Swiss data privacy regulator will be responsible for the organization’s oversight.

So far, 27 companies have signed a loose agreement to be part of the association.

Visa’s CEO and board chairman Alfred F Kelly has however downplayed Visa’s involvement with Libra saying that although they have signed a “non-binding letter of intent to join Libra,” so far “no one has yet officially joined”.

Facebook claims that it will have limited control over the Libra network; however, Libra’s association charter is un-ratified.  

Do you think Facebook will manage to appease regulators to launch Libra by 2020? Share your thoughts with us in the comments section below

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