European Union antitrust regulators have begun conducting a preliminary investigation into Facebook’s plans to launch a digital currency, according to a new report from Bloomberg. Regulators are reportedly concerned that the Libra currency could shut out rivals and create “competition restrictions” related to the use of information and consumer data. The EU is also examining the integration of Libra wallets into Facebook’s WhatsApp and Messenger services, according to Bloomberg.
The source of the report is a questionnaire sent out by the European Commission to groups involved with the Libra proposals. According to Bloomberg, documents like these are often part of early steps towards an official inquiry. Facebook and the European Commission declined to comment to Bloomberg on the potential investigation.
The European Commission would not be the first regulator to have raised concerns about the digital currency, which will be run by a group of companies, including Facebook, as part of the Libra Association. In the US, Facebook’s cryptocurrency chief David Marcus has faced questions from the House Financial Services committee, during which one representative told him that they didn’t think Facebook should launch Libra at all. Lawmakers in France and Germany were also quick to object to Facebook becoming a “shadow bank” with its own sovereign currency. Earlier this month, data privacy regulators around the world asked for transparency about how the Libra Association will process personal data.
Facebook itself has said that it won’t launch Libra until it has “fully addressed regulatory concerns” surrounding the digital currency. A charter is yet to be put in place for the Libra Association, meaning the rules for how Libra will operate are still unknown. Given the amount of interest regulators have already shown the currency, any charter produced is likely to face intense scrutiny. Marcus has previously said that he expects the currency to go through the “most extensive and most careful pre-launch oversight” in financial tech history.