German Antitrust Ruling Restrains Facebook Data Collection

Germany’s Federal Cartel Office, the country’s competition authority, issued an antitrust argument to restrict Facebook’s data collection. Stating that Facebook currently provides users with a stark choice between allowing the company to collect unlimited data or not using the site, the Federal Cartel Office stated that Facebook must allow users to refuse the company’s bid to collect their data and automatically merge it with data from Instagram, WhatsApp and non-Facebook sites. The decision impacts 32 million German users.

The New York Times reports that the Federal Cartel Office president Andreas Mundt noted that, “the combination of data sources substantially contributed to the fact that Facebook was able to build a unique database for each individual user and thus to gain market power.” His office’s ruling comes at a time when Facebook is under “intense scrutiny by officials in the European Union and the United States.”

German authorities (and those in some other European countries) stated that third-party sites that use “tools like Facebook’s ‘like’ and ‘share’ buttons and its analytics service … Facebook Pixel” has allowed the company to gain unfair leverage, thus furthering “a larger antitrust argument” based on “a kind of data coercion.”

With the new rule in place, Facebook can “continue collecting data about people on its own platforms … but it will need permission before collecting data about its users from non-Facebook sites and combining it with their Facebook account data … [and] also need permission to combine Facebook user account data with user data on company-owned services like WhatsApp and Instagram.” The decision does not carry a fine.

Facebook, which plans to appeal the decision, responded that it is “merely popular in Germany, not dominant, and was being unfairly targeted,” adding that German regulators are trying “to implement an unconventional standard for a single company.” Ireland and the U.K. are also “investigating Facebook’s data-handling practices under the new law.”

Bloomberg reports that Facebook “wants you to know that it doesn’t sell your data to advertisers, per se, and that you can limit data sharing with some other apps … but [it] still isn’t being transparent about the ways it collects information on you, and it’s quietly stepping up efforts to grab lots more.”

Facebook tracks people on other websites and apps, uses “IP addresses to target ads to people who turned off location-based tracking on their phones,” collects “call and text histories from users’ Android devices,” stores “facial data from people who never agreed to biometric scans” and recently was “caught monitoring the phone activity of some kids as young as 13.”

Chief executive Mark Zuckerberg “has stressed that Facebook isn’t selling user data … [but] in privacy terms, this is a largely semantic distinction,” since it uses the data to help its clients deliver personalized ads. Bloomberg states that, “a current plan involves merging the background messaging functions of the other apps it owns (Instagram, WhatsApp, and Facebook Messenger) so people can send chats among services.”

Although Facebook said it will encrypt messages, it doesn’t say that “making messaging possible across all the different accounts would make it easier for it to know who’s who” and that “confirming users’ identities across apps would strengthen Facebook’s ad business.”

Related:
Senators Grill Facebook, Google, an Apple Over Invasive Apps, Wired, 2/7/19