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Chronicle Pepperpot February 10, 2019
Facebook was clobbered by a landmark EU ruling that could mean major changes to the way it does business Germany’s antitrust regulator, the Bundeskartellamt, or Federal Cartel Office, on Thursday issued Facebook with an ultimatum: Stop hoarding people’s data. Following an unprecedented three-year investigation involving extensive conversations with Facebook, the Bundeskartellamt issued a press statement declaring that it had “imposed on Facebook far-reaching restrictions in the processing of user data.” It demands that Facebook — which has 32 million monthly users in Germany — change its terms and conditions so that people can explicitly stop it from hoarding data from different sources, including Facebook-owned apps like WhatsApp and Instagram as well as third-party websites with embedded Facebook tools such as “like” or “share” buttons. The regulator says bundling users’ data together from different sources without explicit consent results in a lack of control. It also said the extent to which the social network amassed data from elsewhere was an abuse of its dominant market position. “The only choice the user has is either to accept the comprehensive combination of data or to refrain from using the social network,” the Bundeskartellamt’s president, Andreas Mundt, said in a press release. “In such a difficult situation the user’s choice cannot be referred to as voluntary consent.” Facebook uses its giant wells of user data to target advertising with ruthless efficiency. Some 99% of its revenue of $55.8 billion last year came from advertising on its platforms. Mundt told journalists in Bonn, Germany, that the decision was a step in the direction of breaking up dominant tech companies, Bloomberg reports. “People always ask to break up huge internet companies,” he said, adding: “Well what we do here today is really something like internally breaking them up.” In an FAQ about the ruling, the Bundeskartellamt said that if Facebook planned to continue combining users’ data from various sources, the type of data processing it could use would be “substantially restricted.” If it takes this course, Facebook would have four months to draw up proposals to present to the Bundeskartellamt. If the Bundeskartellamt ruling proves to be effective in Germany, it could snag the attention of other regulators around the world. Germany has been among numerous countries leading the regulatory charge against Silicon Valley giants. Last year, it introduced fines of up to €50 million ($57 million) for companies, including Facebook and Twitter, for failing to remove hate speech. This news comes less than a month after it was revealed that Facebook was planning to merge the back ends of Facebook Messenger, Instagram, and WhatsApp, a move that CEO Mark Zuckerberg said wouldn’t happen until 2020 at the earliest. FACEBOOK TO APPEAL In a blog post published soon after the ruling, Facebook said it disagreed with the Bundeskartellamt and intended to appeal the decision. It must lodge its formal appeal with the Düsseldorf Higher Regional Court in the next month. Yvonne Cunnane, Facebook’s head of data protection in Ireland, and the company’s associate general counsel, Nikhil Shanbhag, wrote the blog post.