Trouble in court for the social network
against big US technology companies, said in a speech yesterday, that the company’s efforts ensured a less-than-maximumfine.
“Thanks to [Facebook’s] co-operation, the fine is lower than it would have been otherwise,” she said.
Facebook says it flagged changes in its WhatsApp data sharing policy with the commission last August, and admitted to having misled authorities during the acquisition.
The company says it “acted in good faith” and the errors “were not intentional”, adding that the announcement “brings this matter to a close”.
But while Facebook may have got off relatively lightly, the case does not mean an end to its regulatory challenges in Europe.
In the past week, France’s data protection agency slapped the company with a €150,000 bill for inappropriately collecting and using consumer data. On the same day, authorities in Belgium and the Netherlands released a joint statement that criticised the business for how it tracked users and targeted them with advertising.
All of this came just days after Italian authorities fined WhatsApp €3m for sharing data with Facebook without adequately warning users.
The company also faces the prospect
European Court of Justice rules the 15-year-old “safe harbour” agreement that allowed companies to transfer data to the US is invalid
German court fines Facebook €100,000 for failing to elucidate how content would be used
German competition authority opens probe into whether Facebook abused its marketing power by infringing data protection rules
Facebook wins an appeal in Belgium against a court ruling that said it inappropriately collected digital information on users and non-users
Hamburg authorities order Facebook to stop storing data of German WhatsApp users
French data protection agency fines Facebook €150,000 over how it collects and uses consumer data
Italy fines WhatsApp €3m for sharing data with its parent group of a new levy in the UK, proposed in the Conservative party manifesto yesterday, to support work to stop online abuse.
Facebook is the latest Silicon Valley company to find itself in the crosshairs of European regulators, joining Google, Amazon and Apple. Authorities insist that the inquiries are discrete but one area in which the companies face a coordinated effort is how they collect and use data.
This is the battle Brussels is pondering and it has two lines of attack: data protection and competition policy.
“The future of big data are not just about technology,” Ms Vestager said in a speech last autumn. “It’s about things like data protection, consumer rights and competition. Things that give people confidence that big data won’t harm them.
“If we want big data to fulfil its promise, then we need to enforce the rules effectively.”
Phil Lee, a data protection specialist at Fieldfisher, the law firm, says the tension between European privacy norms and the business models of Facebook and Google means that regulators and big US technology groups are heading for a “showdown”.
“Europe has a sense that Silicon Valley companies are not fully engaging with data protection in the way they would like,” he says.
The EU has the strictest privacy rules of any major market and data protection agencies take an expansive view of their authority. Although the social network has its main headquarters in Ireland, it has offices that sell advertising in countries across the bloc. France, Germany, the Netherlands and Belgium say this gives them free rein to oversee and even fine the US group. Facebook disputes this view, saying that only Ireland should oversee its data policies.
The second line of attack from Brussels is less concrete than the data privacy concerns, as competition authorities are coming to grips with how to regulate competition in markets without prices, where people exchange their data for free services. “The competition rules weren’t written with big data in mind. But the issues that concern us haven’t changed,” Mrs Vestager says.
Competition authorities are struggling to Margrethe Vestager: Facebook’s co-operation curbed level of fine decide how to regulate competition in markets where people give up their data in exchange for free services. “Most of the time these companies are now powerful not because of assets, but because of the data they have,” says Jan Philipp Albrecht, a Green MEP who oversaw the introduction of the EU’s new data protection rules known as GDPR. “If you use legally obtained data for market abuse, or for discrimination of consumers, then this should be taken into account by competition law. This is long overdue.” Delving into Facebook’s data practices would not be unexpected for European antitrust authorities. Bundeskartellamt, Germany’s antitrust agency, is already conducting a closely watched investigation into whether the social network abused its market power by infringing data protection rules. And Facebook has to worry about more than just regulators: European consumers are also awakening to their privacy rights and will soon have the right to demand damages. In 2012, Max Schrems, a 24-year-old Austrian law student, launched a series of cases against Facebook for invading his privacy through its aggressive data collection practices. His case led to the European Court of Justice striking down the Safe Harbour agreement, used by several large US companies to transfer data between Europe and the US.
Mr Schrems has also filed a classaction suit on behalf of 25,000 Facebook users for the company’s privacy violations, for which he is claiming up to €12.5m.
“Under GDPR, you will have the right to claim emotional damages for any violation of privacy law,” says Mr Schrems. “So if Facebook merges your data with WhatsApp, you can go after them for damages. Imagine if billions of users ask for $500 each. It will be a whole different ball game.”
Internet companies have so far remained largely unregulated because their services have not been mainstream enough to catch the attention of politicians, he adds. “Now, it is a reality in all sectors of the economy so it has to be regulated like everything else. Europe started off with soft touch regulation but none of that worked, so they are moving into lawmaking,” he says. Additional reporting by Paul McClean and Hannah Kuchler in San Francisco