German watchdog orders crackdown on Facebook’s data gathering

7 Feb 2019

Facebook on a mobile device. Image: AllaSerebrina/Depositphotos

Germany’s competition authority has told Facebook it can no longer pool collected data without the permission of its users.

Today (7 February) the Federal Cartel Office (FCO) in Germany said it would be taking a harder line on what it dubbed Facebook’s “practically unrestricted collection and assigning of non-Facebook data”.

According to Reuters, the FCO, which acts as the country’s antitrust watchdog, called for a stricter regime on Facebook’s data collection practices. The FCO says the matter is under its remit as it alleges Facebook abused its dominant position in the market to collect data about users without their consent or knowledge.

The German body said that Facebook requires “voluntary consent” to pool data gathered on WhatsApp and Instagram with its own data. It also requires consent to collect data from third-party sites outside of its own family of platforms. The FCO said: “If consent is not given … Facebook will have to substantially restrict its collection and combination of data.”

An appeal is incoming

The company has said it will appeal the decision, which was the end result of a three-year investigation. Facebook said that the FCO overstepped its bounds by pursuing a data privacy case, which it argues falls under the remit of another regulatory body. It has a month to challenge the decision before it comes into effect.

A spokesperson for the company said: “Since 2016, we have been in regular contact with the [German authorities] and have responded to their requests. As we outlined publicly in 2017, we disagree with their views and the conflation of data protection laws and antitrust laws, and will continue to defend our position.”

The spokesperson added that the ruling by the FCO also misinterprets its compliance with GDPR and “threatens the mechanism European law provides for ensuring consistent data protection standards across the EU”.

The Facebook representative claimed that the tracking helps show internet users more relevant ads and lets advertisers measure campaign success more easily, as well helping to identify fake accounts.

FCO compliance

If the decision is upheld, the company will need to come up with technical tools that ensure it complies with the FCO within four months.

Andreas Mundt, president of the FCO, said that the combination of data sources in this case “substantially contributed to the fact that Facebook was able to build a unique database for each individual user and thus to gain market power”. In particular, the FCO objected to how Facebook can track people online who are not members of the site, for example by tracking visitors to sites with embedded Facebook ‘like’ and ‘share’ buttons.

Privacy International’s head of advocacy and policy, Tomaso Falchetta, said: “Privacy harms are directly caused by the business models of companies in dominant positions, which can impose excessive collection of data on people who have become ‘captive users’.”

Dr Marc Al-Hames, general manager of German data protection tech firm Cliqz, said: “Social media create social pressure. And Facebook exploits this mercilessly – ‘Give me your data or you’re an outsider.’ That’s clearly an abuse of a dominant market position.”

Not everyone agrees. Eline Chivot of the Center for Data Innovation said: “The digital economy has evolved significantly in the 15 years since Facebook was founded, in large part thanks to more and better use of data. And, over the years, companies have become more transparent and consumers have learned more about how digital platforms operate.

“It is now time for regulators to recognise personal data is necessary to innovation in the digital economy, and act accordingly.”

Facebook on a mobile device. Image: AllaSerebrina/Depositphotos

Ellen Tannam was a journalist with Silicon Republic, covering all manner of business and tech subjects