February 10, 2020
The European Commission’ antitrust probe into Facebook is now seeking internal documents related to allegations that Facebook suppressed competition by leveraging its own access to users’ data. EU investigators are also looking into changes Facebook made to software interfaces that enabled app developers to access data, as well as more information on Facebook’s use of Israeli VPN app Onavo it purchased in 2013. Facebook, which shut down Onavo last year, said it disclosed its data collection to users.
The Wall Street Journal notes that in 2018 it reported, “Onavo provided Facebook detailed data on its VPN customers’ use of rival apps, giving Facebook intelligence on competitors before they became major threats.” EU investigators recently asked Facebook for “an array of documents — including internal emails, chat logs and presentations related to those topics,” and intended to rely on an EU law that levies daily fines for noncompliance.
Facebook pushed back, “arguing that the orders initially were so broad that they would produce millions of documents and could surface personal information about Facebook employees … [and] in response, the commission recently withdrew the order.” Sources stated that the commission will issue a new order with a reduced “scope of its document request.”
WSJ states that, “the EU’s interest in how Facebook manages access to user data sheds new light on a preliminary probe that could pose a major challenge to the company.” Should the probe result in a decision against Facebook, “the EU could order Facebook to change its business practices and issue fines of up to 10 percent of world-wide annual revenue, which for Facebook would amount to more than $7 billion, based on Facebook’s revenue in 2019.”
Sources said that the Commission’s “decision to make binding requests stemmed in part from authorities’ apparent lack of confidence that Facebook would comply fully.”
When the EU reviewed Facebook’s purchase of WhatsApp, the Commission ended up fining it €110 million (nearly $123 million at the time) in 2017 “for providing inaccurate or misleading information.” At that time, “Facebook said the errors in its filings were unintentional and that it had acted in good faith.”
Facebook chief executive Mark Zuckerberg is planning a trip to Brussels “during which he might meet with EU competition chief Margrethe Vestager,” said a source. WSJ notes that, “under Vestager, EU competition authorities increasingly have focused on the data practices of tech giants — including Amazon and Alphabet as well as Facebook — in assessing whether such companies are abusing their alleged market dominance.”