Germany clamps down on Facebook’s user data collection practices

Bonn [Germany]: In a landmark regulation, Germany has restricted Facebook from combining user data from different Facebook-owned sources like Whatsapp and Instagram, in a bid to limit the social media giant’s dominance in the German market for social networks.

The Bundeskartellamt, which is Germany’s national competition regulator, made the decision on Thursday, noting that the combination of data by Facebook had to be restricted unless and until there was complete and voluntary consent on the user’s part.

“If consent is not given for data from Facebook-owned services and third-party websites, Facebook will have to substantially restrict its collection and combining of data. Facebook is to develop proposals for solutions to this effect,” the agency noted in an official statement.

So far, Facebook has allowed its users to use the social media network, free of cost, under the precondition that the company can collect user data across Facebook-owned services and third party websites. All of this data is combined and assigned to the Facebook user account, giving Facebook a highly detailed and unique database for each individual user, gaining market dominance in Germany.
“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. 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,” Andreas Mundt, the President of the Bundeskartellamt put forth.

He further noted that Facebook is subject to special obligations under competition law as a dominant company. “In the operation of its business model, the company must take into account that Facebook users practically cannot switch to other social networks,” Mundt 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 opined.

The agency also outlined that Facebook’s terms of service and the manner and extent to which it collects and uses data are in violation of the European data protection rules to the detriment of users.

“On the one hand there is a service provided to users free of charge. On the other hand, the attractiveness and value of the advertising spaces increase with the amount and detail of user data.

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,” Mundt mentioned.

The Bundeskartellamt’s decision, however, is not yet final. Facebook has one month to appeal the decision to the Düsseldorf Higher Regional Court.