FB: Friend or Foe?

In Germany on Thursday, there was bad news for Facebook. In India, there was good news from Facebook ahead of the general elections. Germany’s Federal Competition Office said it would impose new limits on how Facebook collects data from subsidiaries WhatsApp and Instagram, as well as third-party websites with embedded Facebook features such as ‘Like’ buttons.

If Facebook fails to comply, the cartel office could impose fines of up to 10 per cent of the company’s annual global revenues, which grew by 37 per cent to $55.8 billion last year.

Aiming to bring transparency to ads related to politics in India, Facebook launched a tool that will allow its users to know the people behind a particular political ad on the platform and how much they spent for it.

Starting on Thursday, users will be able to see political ads with “Published by” or

“Paid for by” disclaimers, Facebook said.

For the disclaimer, authorised advertisers can name themselves, a page they run or another organisation as the entity behind the ad ad.

If they name another organisation, the social media giant will also require additional credentials — like a phone number, email and website or a Media Certification and Monitoring Committee Certificate from India’s Elections Commission. “This is to help make sure the organisation cited is authentic,” said Shivnath Thukral, Facebook’s Public Policy Director for India.

Facebook first announced these plans back in December, when advertisers were able to begin authorisations on mobile — verifying their identity and location to run political ads.

While these measures are still voluntary for advertisers, enforcement of these new features will start on February 21, Facebook said.

When a person clicks on the disclaimer, they will be taken to a searchable Ad Library where they can see the ad’s creative, start and end date, and performance data, including range of impressions, range of spend, and information about who saw the ad, like age, gender and location across India.

The disclaimer credentials will also appear in the Ad Library, Facebook said.

In Germany, FCO chief Andreas Mundt said in a statement that rather than requiring users to accept that data can be folded into their Facebook accounts under a one-off agreement to the social network’s terms and conditions, users must in future be asked for their specific consent in both cases.

“In future, Facebook will no longer be allowed to force its users to agree to the practically unrestricted collection and assigning of non-Facebook data to their Facebook user accounts,” he said. “If users do not consent, Facebook may not exclude them from its services and must refrain from collecting and merging data from different sources.”

The FCO found that Facebook has a “dominant” position in social networking in Germany, with its 23 million daily active users representing 95 per cent of the market — meaning there is no viable alternative service for most people.

That meant that “Facebook’s conduct represents above all a so-called exploitative abuse”, the authority argued.

“The only choice the user has is either to accept the comprehensive combination of data or to refrain from using the social network,” Mundt said.

“In such a difficult situation the user’s choice cannot be referred to as voluntary consent.”

In its own statement, Facebook said it would appeal the FCO’s decision.

“The Bundeskartellamt’s decision misapplies German competition law to set different rules that apply to only one company,” the California firm said, adding that “we face fierce competition in Germany” from the likes of YouTube, Snapchat and Twitter.

Rather than the FCO, the Irish Data Protection Commission should be overseeing Facebook’s use of data as the company’s European HQ is based in Dublin, the social network said.

German Justice Minister Katarina Barley welcomed the ruling. “Users are often unaware of this flow of data and cannot prevent it if they want to use the services,” she said. “We need to be rigorous in tackling the abuse of power that comes with data.”

The German anti-trust regulator’s powers were expanded in 2017 to include consumer protection in public interest cases where it could argue that a company — such as Facebook — had so little competition that consumers have no effective choice.

Facebook said the cartel office failed to recognise the extent of competition it faced from YouTube or Twitter for users’ attention, and also said the regulator was encroaching into areas that should be handled by data protection watchdogs.

Brussels-based anti-trust lawyer Thomas Vinje of Clifford Chance said the decision had potentially far-reaching implications. “It’s limited to Germany but strikes me as exportable and might have a significant impact on Facebook’s business model,” he said.