South Korea’s antitrust watchdog has taken steps to penalise Meta Platforms for allegedly failing to protect local consumers on its e-commerce platforms of Facebook and Instagram, sources said on Friday.

The Fair Trade Commission (FTC) has concluded its investigation into Meta’s purported violations of the country’s e-commerce law and subsequently sent a report to the U.S. technology giant, according to the sources, reports Yonhap news agency.

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The investigation primarily focused on Meta’s handling of consumer issues within the Facebook Marketplace and Instagram Marketplace, they added.

These marketplaces allow Facebook and Instagram users to buy and sell new and used products locally. Meta also offers a service to help small businesses create separate business accounts for e-commerce activities.

The South Korean e-commerce law demands e-commerce platform operators provide information about sellers to consumers and establish mechanisms for addressing consumer complaints and disputes.

The FTC alleges that Meta failed to fulfill these obligations as it has not taken enough measures to remedy or prevent consumer damage, including fraud and counterfeit sales on its platforms.

However, some experts argue that Meta, as a social media service operator, may not fall directly under the jurisdiction of the South Korean e-commerce law, which targets online shopping platform operators.

Nevertheless, the FTC believes that Meta’s provision of separate business accounts on Facebook and Instagram qualifies it as an e-commerce platform operator under the South Korean law, according to the insider sources.