Germany orders Facebook to restrict data gathering practices

Germany orders Facebook to restrict data gathering practices
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Germany on Thursday ordered Facebook to heavily restrict its data-gathering practices, ruling that the social media giant has abused its market dominance as it collects data on individual users without their explicit consent.

Germany's antitrust watchdog, the Bundeskartellamt, after a lengthy investigation, issued the landmark ruling that the social media giant must obtain voluntary consent before they collect data from users of Facebook-owned services WhatsApp and Instagram, as well as third-party websites.

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"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," the Bundeskartellamt said in a press release. Facebook has been given four months to develop solutions to the concerns raised in the order.

The tech powerhouse has said that it plans to appeal the order within the month.

"The Bundeskartellamt underestimates the fierce competition we face in Germany, misinterprets our compliance with [European privacy rules] and undermines the mechanisms European law provides for ensuring consistent data protection standards across the EU," Facebook said on Thursday.

Facebook in a blog post titled "Why We Disagree With the Bundeskartellamt" argues that it does not "dominate" the German market as the antitrust watchdog claims, pointing to a survey that found 40 percent of German social media users do not use Facebook.

"We face fierce competition in Germany, yet the Bundeskartellamt finds it irrelevant that our apps compete directly with YouTube, Snapchat, Twitter and others," Facebook wrote.

The German watchdog, in its press release, pointed out that services like Snapchat, YouTube, Twitter, LinkedIn and others "only offer parts of the services of a social network" so are not considered part of the "relevant market." 

"However, even if these services were included in the relevant market, the Facebook group with its subsidiaries Instagram and WhatsApp would still achieve very high market shares that would very likely be indicative of a monopolisation process," the Bundeskartellamt wrote. 

Facebook is also arguing that it is in compliance with the General Data Protection Regulation, a far-reaching set of privacy rules in the European Union that went into effect last year.

Germany says Facebook has faced no restrictions as it collects user data from Whatsapp, Instagram and third-party websites without consent, enabling them to build unique databases for each individual user and "thus gain market power."

"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, president of the Bundeskartellamt, said in a statement. 

If Facebook does not comply with the ruling, the Bundeskartellamt could impose fines of up to 10 percent of the company’s annual global revenues.