German competition watchdog to rule on Facebook

Irving Hamilton
February 10, 2019

Among other conditions, private use of the network is subject to Facebook being able to collect an nearly unlimited amount of any type of user data from third party sources, allocate these to the users' Facebook accounts and use them for numerous data processing processes.

This stunning verdict by the Federal Cartel Office (Bundeskartellamt) also means that Facebook's business model, which is based on amassing massive amounts of user information, is also illegal and must be changed. The data in question does not only concern WhatsApp and Instagram, but also all other third-party sources used by Facebook.

"We tailor each person's Facebook experience so it's unique to you, and we use a variety of information to do this - including the information you include on your profile, news stories you like or share and what other services share with us about your use of their websites and apps".

"The GDPR specifically empowers data protection regulators - not competition authorities - to determine whether companies have lived up to their responsibilities", it said.

And the FCO specified that an "obligatory tick on the box" by which a user would agree to all the company's terms was not sufficient basis for "such intensive data processing". It should develop proposals to do this within 12 months, subject to the outcome of appeal proceedings at the Duesseldorf Higher Regional Court that should be filed within a month.

The case built by Bundeskartellamt is based on what it has deemed market abuses by the dominant social media player in Germany.

Facebook says it complies with the GDPR and protects user information. Additionally, Germany's justice minister, Katarina Barley, told Reuters that the company "had reached far beyond its platform to collect user data".

The regulator ordered Facebook to stop the practice in a ruling that experts say could shape the company's future - and potentially even lead to its breakup.

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While Russians predominantly use VK and Chinese log on to WeChat for their social network needs, there are few viable alternatives to Facebook in Europe, where it has 282 million daily active users.

Of course, Facebook has access to all of the data that users have posted.

The office's probe began three years ago, amidst pressure on European governments to show that they are capable of standing up to large foreign internet companies, which are seen by many as competing unfairly in European markets while paying minimal tax in the EU.

"We received two complaints against Facebook in relation to the alleged sharing of users" private messages with "partners'", Valerie Lawton, spokeswoman for privacy commissioner's office, said in an email Friday.

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. "Yet the Bundeskartellamt is trying to implement an unconventional standard for a single company".

Facebook, however, disagreed with the report and is planning on appealing the restrictions.

Germany's antitrust watchdog has hit the social network with a ban on combining user data it gathers from different sources, unless it has explicit consent from users.

The practise becomes a bit more nefarious however.

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