German regulator orders Facebook to restrict data collection
Germany’s anti-monopoly regulator has ordered Facebook not to combine user data from its WhatsApp, Instagram and Facebook apps without consent, after a major three-year investigation into potentially anti-competitive actions.
The federal cartel office announced on Thursday that it would be giving the technology company 12 months to change its data policies.
Once the ruling comes into force, Facebook will need “voluntary consent” from users before it can combine data from WhatsApp, Instagram and Facebook (known internally as the “blue app” to distinguish it from the wider company).
Andreas Mundt, the president of the office, said: “We are carrying out what can be seen as an internal divestiture of Facebook’s data. 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.”
The company will also be forced to stop linking data collected from thirdparty websites, using technologies such as the Facebook tracking pixel, unless users again give voluntary consent.
The ruling will strike a blow against Facebook’s intention, revealed just last month, to fully integrate the technology underpinning its three main services so that users can send messages between them. The plan was widely seen as pre-emptive move to make it harder for competition regulators to force the company to spin-off one of its subsidiaries.
In a blogpost, Facebook responded to the ruling, saying: “We disagree with their conclusions and intend to appeal.”
Yvonne Cunnane, the head of data protection at Facebook Ireland, and Nikhil Shanbhag, the director and associate general counsel, added in the post that the cartel office “underestimates the fierce competition we face in Germany, misinterprets our compliance with GDPR [the EU’s General Data Protection Regulation] and undermines the mechanisms European law provides for ensuring consistent data protection standards across the EU.”
“We face fierce competition in Germany, yet the Bundeskartellamt [cartel office] finds it irrelevant that our apps compete directly with YouTube, Snapchat, Twitter and others,” the post said.
“Using information across services helps to make them better and protect people’s safety. Facebook has always been about connecting you with people and information you’re interested in. We tailor each person’s Facebook experience so it’s unique to you, and we use a variety of information to do this.”
The Information Technology and Innovation Foundation, a US thinktank that receives substantial funding from the tech industry, warned that the ruling risked muddling antitrust policy and data protection enforcement. “Antitrust enforcement is not the appropriate remedy for data privacy complaints,” said ITIF’s president, Rob Atkinson. “Facebook is not a monopoly in the actual relevant market, the ad market, or even in the social networks market. Rather than an abuse of dominance investigation, this ruling represents a power grab by German authorities that will create confusion throughout the European Union.”
Mundt said that Facebook’s data practices contributed to its market power. “As a dominant company, Facebook is subject to special obligations under competition law,” he said. In view of Facebook’s superior market power, an obligatory tick on the box to agree to the company’s terms of use is not an adequate basis for such intensive data processing,” he said.
Facebook forced every user worldwide to reissue consent to the company to use their personal data for advertising purposes following the introduction of the GDPR, which tightened the requirement for consent for data processing in the EU .
But the social network was criticised by activist groups such as Noyb (“None of your business”) for not allowing users to decline consent without also forcing them to delete their account.
“In the end, users only had the choice to delete the account or hit the agree button – that’s not a free choice, it more reminds of a North Korean election process,” said Noyb’s chair, Max Schrems, in May 2018.