Facebook To Appeal German Privacy Ruling

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The social media giant denies competition officials have standing to pass judgement over it – in spite of a German market share estimated at 95 percent

Facebook has said it plans to appeal a decision by Germany’s antitrust regulator that would require the social media company to make sharp changes to the way it collects user data across multiple services and websites.

The Federal Cartel Office (FCO) said Facebook had abused its dominant position in the country to carry out “intensive” data processing.

In particular, it said users were largely unaware of the amount of data Facebook collected on them from third-party sources, such as buttons or invisible pixels embedded on third-party websites, third-party website logins that accept Facebook credentials, or Facebook’s own applications, such as Instagram, WhatsApp and Facebook Messenger.

The decision requires Facebook to obtain users’ “voluntary consent” if it wishes to gather such third-party data and integrate it into a user’s main Facebook profile.

Federal Cartel Office president Andreas Mundt

‘Voluntary consent’

Without such consent, Facebook would be free to collect data but would not be allowed to pool it with other information on a particular individual.

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”.

The ruling only applies to users resident in Germany, but is likely to influence other European regulators.

The FCO emphasised that it had liaised closely with the European Commission and other competition authorities.

“In future, Facebook will no longer be allowed to force its users to agree to the practically unrestricted collection and assigning of non-Facebook data to their Facebook user accounts,” said FCO president Andreas Mundt.

He said the pooling of data on particular individuals from multiple sources had contributed to Facebook’s market power.

He added that the firm’s 23 million daily active users in Germany amounts to a market share of 95 percent, and that it is difficult for users to leave since there is no “plausible alternative”.

One month to appeal

Facebook has one month to appeal, after which the decision will become binding.

The FCO has given the firm four months to submit plans for how it will implement the required changes, which must be in place within the following 12 months.

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.

Facebook said it would appeal “so that people in Germany continue to benefit fully from all our services”.

The company said it faced “fierce” competition in Germany from YouTube, Snapchat, Twitter and others and that the FCO’s concerns were a matter for data regulators, and not competition officials.

“The (General Data Protection Regulation) specifically empowers data protection regulators – not competition authorities – to determine whether companies have lived up to their responsibilities,” Facebook said.

“And data protection regulators certainly have the expertise to make those conclusions. The (FCO) order threatens to undermine this, providing different rights to people based on the size of the companies they do business with.”

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