Published: Sat, February 09, 2019
Finance | By Loren Pratt

Germany to restrict Facebook's data gathering activities

Germany to restrict Facebook's data gathering activities

Facebook said it disagreed with the ruling and that German authorities had underestimated the competition the firm faced in the country.

This stunning verdict by the Federal Cartel Office (Bundeskartellamt) also means that Facebook's business model, which is based on amassing massive amounts of user information, is also illegal and must be changed.

Without such consent, Facebook would be free to collect data but would not be allowed to pool it with other information on a particular individual.

The French National Data Protection Commission said the USA search giant failed to obtain consumers' consent before using their data to deliver more targeted advertising.

Germany's antitrust agency is hitting Facebook with "far-reaching restrictions" on the social media network's practice of merging its users' data that was gleaned from WhatsApp, Instagram and millions of third-party websites and apps.

The office said many users were not aware that Facebook is able to "collect an nearly unlimited amount of any type of user data from third-party sources". With the Cambridge Analytica controversy, and ongoing reports of political interference by foreign groups, Facebook has been doing all it can to show that it is responsible, that it is able to manage and make effective, secure use of the vast data insights that its 2.3 billion users give it access to.

A German court has ruled that Facebook will need to cut down on collecting user data across different platforms unless customers have given explicit consent.

The social network had been gathering "practically unrestricted" information about people by following their activities on other websites and apps such as Instagram.

"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", said Andreas Mundt, President of the Bundeskartellamt. If it fails to secure a favorable decision, Facebook will have four months to submit proposals for how to achieve compliance with the new data use requirements.

Facebook claims the Federal Cartel Office has overstepped the mark by pursuing a data privacy matter that Facebook says falls under the remit of another regulator. The reason companies like Facebook and Google have been so successful in the early days of the data-sharing economy is because of the accuracy of advertising. However, assigning the data to Facebook user accounts will only be possible subject to the users' voluntary consent.

Taking issue with German regulators' characterization of Facebook as a monopoly, Cunnane and Shanbhag cite their own survey showing that over 40% of social media users in Germany don't use the social network. The FCO concluded that this practice is neither justified under the General Data Protection Regulation (GDPR) nor appropriate under competition law standards applicable to monopolists. To come to this conclusion the FCO cooperated closely with data protection authorities.

The regulator said it had not included services such as Snapchat, YouTube or Twitter, and professional networks like LinkedIn and Xing, as being in the market it has considered Facebook to be dominant in because they "only offer parts of the services of a social network and are thus not to be included in the relevant market".

Not only does Facebook collect information about you from its core platform, but by supplementing this picture with more detail from third-party sources, a hyper-targeted advertising platform can be created.

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