German anti-trust watchdog announces crackdown on Facebook's data collection practices

Gladys Abbott
February 10, 2019

It comes after global backlash against Facebook was fuelled by last year's Cambridge Analytica scandal.

For example, Facebook's obligatory "tick on the box" to agree to its terms of use was judged to be an inadequate basis for "such intensive data processing".

If users do not agree, the data 'must remain with the respective service and can not be processed in combination with Facebook data, ' they said. By not obtaining sufficient user consent for collecting the data from other apps and sites, the company abused its dominant position in the market and violated European Union personal data protection law, the German regulator said.

Facebook hit back at the ruling in a blog post, noting that collecting such data allows it to display better targeted ads to its users, as well as making it easier to identify fake and harmful accounts. However, the agency noted that while SnapChat, YouTube, Twitter and LinkedIn aren't included in this stat, "even if these services were included in the relevant market, the Facebook group with its subsidiaries Instagram and WhatsApp would still achieve very high market shares that would very likely be indicative of a monopolisation process".

Facebook plans to appeal the ruling in Germany.

In that case, data belonging to tens of millions of Facebook users was harvested by the British company through an online personality quiz.

Brussels-based anti-trust lawyer Thomas Vinje of Clifford Chance said the decision had potentially far-reaching implications.

"This is a landmark decision", he told Reuters. They're simply using their data sharing methods to protect you against terrorism and child abuse, according to Facebook. This is a battle that many firms have fought in court and lost, he added. Tellingly, the company didn't mention how numerous 40 percent of non-Facebook users had installed Instagram or WhatsApp and glossed over the ubiquity of its "like" and "share" buttons entirely. The company says it's collecting all of that data for your own good. "Based on its dominant position, Facebook can use them to optimise its own service and tie more users to its network".

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The FCO found that Facebook has a "dominant" position in social networking in Germany, with its 23 million daily active users representing 95 percent of the market - meaning there is no viable alternative service for most people.

It will appeal against the decision, saying that the regulator "misapplies German competition law to set different rules that apply to only one company".

"On the one hand there is a service provided to users free of charge", Cartel Office President Andreas Mundt said.

"It's limited to Germany but strikes me as exportable and might have a significant impact on Facebook's business model", he said.

While EU's powerful antitrust arm has no open investigations into Facebook, EU Competition Commissioner Margrethe Vestager said she'd "take an interest" into leaked Facebook emails that included a threat to cut off data access to a potential rival.

European regulators have always been concerned about Facebook's plans to deepen the integrating of WhatsApp. having previously fined Facebook 110 million euros for failing to tell them about the ability to combine the data when they examined the deal.

As part of complying with the GDPR, Facebook said it had rebuilt the information it provides people about their privacy and the controls they have over their information, and improved the privacy "choices" that they are offered. It would also soon launch a "clear history" feature, it said. At issue is Facebook's practice of merging the data it collects about users across different services into a unified profile.

The ruling would "implement an unconventional standard for a single company", Facebook said.

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