European Commission investigating whether crypto currency Libra hinders competition

The European Commission has launched an investigation into Facebook’s crypto currency Libra, Bloomberg reports on the basis of a document. The main issue is whether the currency nips competing payment services in the bud. Regulators are also afraid of data misuse.

The investigation is still at an early stage, according to a document that Bloomberg has seen. The European Commission has sent out a first questionnaire asking questions of Facebook and other participants in the Libra project. The researchers are mainly curious whether the project does not lead to unfair competition.

According to the document, the European Commission wants to investigate whether the Libra project is not making it difficult for other payment providers on the market. That would be a particular problem when it comes to collecting and sharing user data. The researchers are afraid, among other things, that Facebook can ‘combine large amounts of personal information with financial data’, and that this would increase the privacy risks of the social network. Regulators are also said to be concerned about the way in which Libra applications within Facebook or services such as WhatsApp and Messenger are integrated.

Facebook introduced the cryptocurrency Libra last month. It is a proprietary payment method with which users can transfer money to each other. Major financial companies such as Visa, Mastercard and PayPal are participating in the project, as well as tech companies such as Spotify, Uber and Vodafone. Shortly after the announcement, regulators were already wary of the new project; politicians from both Europe and the US demanded strict supervision of the means of payment.