Germany's goverment issues Facebook with an ultimatum
Germany's antitrust regulator, the
Bundeskartellamt, or Federal Cartel Office, on Thursday issued Facebook with an
ultimatum: Stop hoarding people's data.
Following an unprecedented three-year
investigation involving extensive conversations with Facebook, the
Bundeskartellamt issued a press statement declaring that it had "imposed
on Facebook far-reaching restrictions in the processing of user data."
It demands that Facebook - which has 32
million monthly users in Germany - change its terms and conditions so that
people can explicitly stop it from hoarding data from different sources,
including Facebook-owned apps like WhatsApp and Instagram as well as
third-party websites with embedded Facebook tools such as "like" or
"share" buttons.
The regulator says bundling users' data
together from different sources without explicit consent results in a lack of
control. It also said the extent to which the social network amassed data from
elsewhere was an abuse of its dominant market position.
"The only choice the user has is
either to accept the comprehensive combination of data or to refrain from using
the social network," the Bundeskartellamt's president, Andreas Mundt, said
in a press release. "In such a difficult situation the user's choice
cannot be referred to as voluntary consent."
Facebook uses its giant wells of user
data to target advertising with ruthless efficiency. Some 99% of its revenue of
$55.8 billion last year came from advertising on its platforms.
Mundt told journalists in Bonn, Germany,
that the decision was a step in the direction of breaking up dominant tech
companies, Bloomberg reports. "People always ask to break up huge internet
companies," he said, adding: "Well what we do here today is really
something like internally breaking them up."
In an FAQ about the ruling, the
Bundeskartellamt said that if Facebook planned to continue combining users'
data from various sources, the type of data processing it could use would be
"substantially restricted." If it takes this course, Facebook would
have four months to draw up proposals to present to the Bundeskartellamt.
If the Bundeskartellamt ruling proves to
be effective in Germany, it could snag the attention of other regulators around
the world. Germany has been among numerous countries leading the regulatory
charge against Silicon Valley giants. Last year, it introduced fines of up to
€50 million ($57 million) for companies, including Facebook and Twitter, for failing
to remove hate speech.
This news comes less than a month after
it was revealed that Facebook was planning to merge the back ends of Facebook
Messenger, Instagram, and WhatsApp, a move that CEO Mark Zuckerberg said
wouldn't happen until 2020 at the earliest.
In a blog post published soon after the
ruling, Facebook said it disagreed with the Bundeskartellamt and intended to
appeal the decision. It must lodge its formal appeal with the Düsseldorf Higher
Regional Court in the next month.
Yvonne Cunnane, Facebook's head of data
protection in Ireland, and the company's associate general counsel, Nikhil
Shanbhag, wrote the blog post.
"The Bundeskartellamt underestimates
the fierce competition we face in Germany, misinterprets our compliance with
GDPR and undermines the mechanisms European law provides for ensuring
consistent data protection standards across the EU," they said.
The Facebook executives argued that
gathering information on users helped improve its services and protected
people's safety and security by shielding them from inappropriate content and
election interference.
Cunnane and Shanbhag added that the
Bundeskartellamt ruling threatened to "undermine" the regulatory
structures put in place by European Union data laws. "GDPR specifically
empowers data protection regulators - not competition authorities - to
determine whether companies are living up to their responsibilities," they
said.
Concluding, the pair said: "Every
day, people interact with companies that connect and use data in similar ways.
And all of this should be - and is - a legitimate area of focus for regulators
and policymakers around the world. Yet the Bundeskartellamt is trying to
implement an unconventional standard for a single company.
"This is the point we'll continue to
make to the Bundeskartellamt and defend these important arguments in court, so
that people and businesses in Germany can continue to benefit from all of our
services."
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