Friday, 22 February, 2019

Germany Forces Facebook to Get User Consent Before Messaging Merger

Andreas Mundt president of Germany's Federal Cartel Office addresses a news conference presenting findings of the anti-trust Facebook banned in Germany from pooling user data without consent
Orlando Vargas | 10 February, 2019, 17:55

In January, Facebook founder Mark Zuckerberg defended his company in the worldwide media, saying its advertising-based business model required collecting personal data. The global conglomerate has a month to lodge their appeal. The company says it takes issue with the Bundeskartellamt's characterization of Facebook as having the "dominant position" in the German market for social networks.

If Facebook fails to comply, the cartel office said it could impose fines of up to 10 percent of the company's annual global revenues, which grew by 37 percent to $55.8 billion a year ago. Facebook said it was being unfairly singled out by the regulator, which has broken new ground by using antitrust law to tackle data privacy.

The regulator said this is against European Union data protection laws.

The ruling only applies to users resident in Germany, but is likely to influence other European regulators. "As we outlined publicly in 2017, we disagree with their views and the conflation of data protection laws and antitrust laws, and will continue to defend our position".

"The Bundeskartellamt's order threatens to undermine this, providing different rights to people based on the size of the companies they do business with", they said. Collecting data from third-party websites and assigning it to Facebook would similarly require consent.

In ruling that Facebook was a "dominant company", the Cartel Office said it was subject to "special obligations under competition law" and 'must take into account that Facebook users practically can not switch to other social networks'.

Mr Mundt argues that Facebook was able to build a "unique database" for each individual users and gain market power.

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Set against this backdrop, the social network is facing a storm of criticism.

The German regulator also noted that Google+ would be shutting down in April of 2019 and that Facebook's other competitors like Snapchat, YouTube, and Twitter only offer "parts of the services" that Facebook does.

The decision is not about Facebook's processing of data generated by its own site, which the Cartel Office acknowledged is the business model for data-based social networks like Facebook.

However, last week a Facebook employee said that the RBC did indeed have the ability to read, write, and delete private Facebook messages from users using the bank's app between 2013 and 2015. "The only choice the user has is either to accept the comprehensive combination of data or to refrain from using the social network". Users must agree to the terms or be excluded from the social network, a hard situation that can not be considered voluntary consent, as required under the law.

Further, the controller must provide a copy of the personal data, free of charge, in an electronic format.

The FCO published a background paper containing more details of the decision it reached.

"From Facebook's perspective, the data are of great economic value", the paper said. While Facebook is still free to gather data about Instagram users and WhatsApp users, this data can not be automatically combined with data gathered via a users' Facebook account. Millions of users make use of Facebook every day to communicate with their loved ones. Facebook is becoming more and more indispensable for advertising customers.

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