Saturday, 23 February, 2019

Germany Forbids Facebook to Combine User Data From Different Sources

Facebook banned in Germany from pooling user data without consent German court orders Facebook to redesign data collection, saying it abuses market dominance
Priscilla Morrison | 09 February, 2019, 22:30

In particular, it said users were largely unaware of the amount of data Facebook collected on them from third-party sources, such as buttons or invisible pixels embedded on third-party websites, third-party website logins that accept Facebook credentials, or Facebook's own applications, such as Instagram, WhatsApp and Facebook Messenger.

These have gone down badly with Germans, reflecting broader concerns over personal surveillance that dates back to Germany's history of Nazi and Communist rule in the 20th century.

The US company has a month to appeal to the decision made after three years of investigations, after which it will have to reassure the "non-combination" of data without users consent.

The damage to competition is not caused by any financial loss, given that Facebook is a free service, but by a loss of control: Facebook users are unable to control what data is used for Facebook's profiling.

In ruling that Facebook was a "dominant company", the Cartel Office said it was subject to "special obligations under competition law" and 'must take into account that Facebook users practically can not switch to other social networks'.

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 Bundeskartellamt decision "goes to the heart of Facebook's business model: excessive data accumulation to maximize its advertising revenue", said Agustin Reyna of the European consumer group BEUC.

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.

Facebook banned in Germany from pooling user data without consent

In particular, the German court was scathing of Facebook's pooling of people's data on third-party applications, like WhatsApp and Instagram, coupled with its online-tracking mechanisms of non-members through "likes" and 'shares'. This follows the Cambridge Analytica scandal of a year ago, where millions of user profiles were harvested for consumer information, without consent.

Antitrust lawyer Thomas Vinje, a partner at Clifford Chance in Brussels, said the Cartel Office ruling had potentially far-reaching implications.

He added that the firm's 23 million daily active users in Germany amounts to a market share of 95 percent, and that it is hard for users to leave since there is no "plausible alternative". To come to this conclusion the FCO cooperated closely with data protection authorities.

The German office called Facebook data collection practices as "exploitative abuse" and that the company's conduct is in complete violation of European data protection rules.

"We support the GDPR and take our obligations seriously".

Facebook, which has been given 12 months to comply with the landmark order, unsurprisingly said it would appeal the ruling that cracks down on its heavy-handed approach to data collection.

Antitrust regulators in Germany are ordering Facebook to change the way it tracks users across digital channels.

Facebook has said that discussions on such a move are at a very early stage. "Voluntary consent" means that access to the service can not be limited to users who consent: if users do not consent, Facebook may not exclude them from its services but will have to substantially restrict its collection and combining of data from different sources.

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