Facebook is being investigated by UK and European competition watchdogs over concerns it uses advertising data to gain an unfair advantage over rivals.

The Competition and Markets Authority (CMA) has launched a probe into whether Facebook has gained an unfair advantage over competitors in providing services for online classified ads and online dating, through how it gathers and uses certain data.

The firm collects data from its digital advertising services, which allow other businesses to advertise to Facebook users, and from its single sign-on option, Facebook Login, which offers people the ability to sign into other websites, apps and services using their Facebook log-in details.

The CMA will look into whether Facebook has unfairly used the data gained from its advertising and single sign-on to benefit its own services, in particular Facebook Marketplace - where users and businesses can put up classified ads to sell items - and Facebook Dating - a dating profile service it launched in Europe in 2020.

The European Commission has also launched its own investigation into Facebook's use of data. The CMA will seek to work closely with the European Commission as the independent investigations develop.

Andrea Coscelli, chief executive of the CMA, said: "We intend to thoroughly investigate Facebook's use of data to assess whether its business practices are giving it an unfair advantage in the online dating and classified ad sectors.

"Any such advantage can make it harder for competing firms to succeed, including new and smaller businesses, and may reduce customer choice.

"We will be working closely with the European Commission as we each investigate these issues, as well as continuing our coordination with other agencies to tackle these global issues.

"As this is only the start of the CMA's investigation, no decision has yet been made on whether Facebook has broken the law."

According to the BBC, Facebook said it would cooperate fully. It said it will demonstrate that both the UK and EU investigations are "without merit".

This is the third investigation into a suspected breach of competition law the CMA has opened recently in digital markets. It is also investigating Google's 'privacy sandbox' and Apple's AppStore.