Ger­man rul­ing could im­pede Face­book’s data-combo moves

South Florida Sun-Sentinel (Sunday) - - Money - By David Ris­ing and Bar­bara Or­tu­tay

BER­LIN — Face­book is push­ing back against a Ger­man rul­ing that could make it harder for the com­pany to com­bine data from all the ser­vices it runs in or­der to tar­get ads even more pre­cisely.

Thurs­day’s rul­ing, though aimed at cur­rent prac­tices, hints at po­ten­tial trou­bles ahead if Face­book fol­lows through with plans to in­te­grate the mes­sag­ing func­tions of What­sApp, In­sta­gram and Mes­sen­ger as early as next year.

Ger­man an­titrust au­thor­i­ties ruled Thurs­day that Face­book was ex­ploit­ing its dom­i­nance in so­cial me­dia in forc­ing users to also al­low the com­pany to col­lect data from other Face­bookowned ser­vices such as What­sApp and In­sta­gram, as well as third-party web­sites through the “Like” and “Share” but­tons.

The Fed­eral Car­tel Of­fice, or Bun­deskartel­lamt, isn’t con­test­ing Face­book’s use of cus­tomer data to tar­get ads on the main Face­book ser­vice. Rather, the rul­ing said Face­book should have to get con­sent separately be­fore us­ing cus­tomer data from other apps and web­sites to do so.

Face­book said it would ap­peal.

The com­pany cur­rently col­lects data on users’ ac­tiv­i­ties on Face­book and the other apps it owns, along with third-party web­sites. So, what some­one views, likes or shares on In­sta­gram — or the broader web — could be used to show that per­son an ad on Face­book.

Face­book also has been mov­ing to fur­ther in­te­grate What­sApp and In­sta­gram into its main ser­vice af­ter ini­tially promis­ing to keep both as stand-alone com­pa­nies when it bought them.

Al­though Face­book hasn’t given many de­tails on its plans to in­te­grate mes­sag­ing, CEO Mark Zucker­berg said that the idea is to help users mes­sage one an­other more eas­ily, with­out hav­ing to worry about who’s on which ser­vice. The com­pany also said it would en­crypt all the mes­sag­ing ser­vices, some­thing it does by de­fault only with What­sApp.

But crit­ics have raised an­other pos­si­ble rea­son — the threat of an­titrust crack­downs. Es­sen­tially, if Face­book com­bines its mes­sag­ing ser­vices so that they are dif­fer­ent in name and de­sign only, it will be much more dif­fi­cult, if not im­pos­si­ble, to then sep­a­rate out and spin off In­sta­gram and What­sApp as sep­a­rate com­pa­nies.

Com­bin­ing the three ser­vices also lets Face­book build more com­plete data pro­files on all of its users. Al­ready, busi­nesses can al­ready tar­get Face­book and In­sta­gram users to­gether with the same ad cam­paign, and ads are likely com­ing to What­sApp even­tu­ally.

Then there’s com­pe­ti­tion from other mes­sag­ing ser­vices, such as Ap­ple’s or Google’s. Users are more likely to stay within Face­book’s prop­er­ties if they can eas­ily mes­sage their friends across dif­fer­ent ser­vices, rather than hav­ing to switch be­tween Mes­sen­ger, What­sApp and In­sta­gram.

Pri­vacy at­tor­ney Scott Ver­nick ex­pects the in­te­gra­tion plans to draw reg­u­la­tory scru­tiny, par­tic­u­larly in Europe. That’s be­cause of Face­book’s prom­ises that it would keep the com­pa­nies sep­a­rate when it bought In­sta­gram in 2012 and What­sApp in 2014. What­sApp’s founders quit the com­pany over dis­agree­ments about user pri­vacy.

“There is a high chance for an­titrust con­cerns, as well as those over how user data is col­lected and used,” Ver­nick said.

There are also wor­ries that Face­book could build deeper pro­files, such as by link­ing phone num­bers to real-life iden­ti­ties, he added. Face­book doesn’t re­quire users to add their phone num­ber, but What­sApp is gen­er­ally used with phone num­bers. Be­tween the two, Face­book gets more data.


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