Germany sets new limits on Facebook data collection

Daniel Fowler
February 9, 2019

'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. Following this issue, Facebook said it disagreed with Bundeskartellamt's conclusions and that they "intend to appeal so that people in Germany continue to benefit fully from all our services".

It's important to note, however, that Facebook has one month to appeal the FCO's ruling-which the company has said it will do.

Mundt also expressed concern over reports that Facebook, which counts 2.7 billion users worldwide, plans to merge the infrastructure of its Messenger, WhatsApp and Instagram services. "Voluntary consent" means that access to the service can not be limited to users who consent: if users do not consent, Facebook may not exclude them from its services but will have to substantially restrict its collection and combining of data from different sources. "Users are often unaware of this flow of data and can not prevent it if they want to use the services", she told Reuters. Where consent is not given, the data must remain with the respective service and can not be processed in combination with Facebook data.

That includes tracking visitors to websites with an embedded Facebook "like" or share button - and pages where it observes people even though there is no obvious sign the social network is present. The body stated that the social media giant has been gathering information about people by following their activities on other websites and apps like Instagram.

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"With regard to Facebook's future data processing policy, we are carrying out what can be seen as an internal divestiture of Facebook's data", said Andreas Mundt, President of the Bundeskartellamt. It should develop proposals to do this within 12 months, subject to the outcome of appeal proceedings at the Duesseldorf Higher Regional Court that should be filed within a month. The decision breaks new ground because it links data protection and antitrust breaches. "It is therefore precisely in the area of data collection and data use where Facebook, as a dominant company, must comply with the rules and laws applicable in Germany and Europe". Germany has consistently been one of the leading nations attempting to tackle the power and influence of the internet players, creating a more tightknit regulatory framework which you would naturally expect in business. Essentially, if Facebook combines its messaging services so that they are different in name and design only, it will be much more hard, if not impossible, to then separate out and spin off Instagram and WhatsApp as separate companies. The FCO explicitly states that users expect platforms to combine their data to some extent, and this is an essential component of social networks' business models.

This case is set to raise many questions in the competition community but certainly the most striking aspect of the decision is that it is entirely based on an alleged infringement of European data protection rules enshrined in the General Data Protection Regulation (GDPR). Facebook on its blog has announced its disagreement with the Bundeskartellamt. Due to Facebook's dominant position users have no option other than to accept Facebook's terms and conditions.

European regulators have always been concerned about Facebook's plans to deepen the integrating of WhatsApp. having previously fined Facebook 110 million euros for failing to tell them about the ability to combine the data when they examined the deal.

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