Facebook has been barred from skimming off German user data from different platforms, including its flagship website, WhatsApp, Instagram and third-party sites which use Facebook features such as its “Like” button.
Germany’s Federal Cartel Office ordered the US company to change its user terms and specifically request permission to combine data from different sources.
“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 antitrust watchdog, said in a statement. Combining data sources “substantially” helped Facebook build a unique database for individual users and boost its market position, he added.
The ruling could be a blow to Facebook’s business model, which relies on the aggregation of data to target users with customized advertisement. Targeted ads are Facebook’s main source of income.
Within minutes of the ruling, Facebook issued a statement saying it would appeal in a Düsseldorf court. The Silicon Valley company says the regulator underestimates the power of rival services such as YouTube or SnapChat, misinterprets data protections regulations, and incorrectly applies antitrust laws.
Facebook’s general terms of service, which allow the company to gather data from all types of websites, do not comply with antitrust regulations because consumers are forced to accept the terms or refrain from using the social network, the regulator said. Because Facebook has a dominant position in Germany’s social-network market, forcing users to accept data mining amounts to “exploitative abuse,” it said.
The antitrust office also said that Facebook’s current practices “are in violation of the European data protection rules to the detriment of users,” but it wasn’t immediately clear whether its ruling has any implications in the European Union or elsewhere.
Other countries could, however, decide to follow Germany’s example. “Many other antitrust agencies have been closely monitoring our decision,” regulator Mundt said. He hoped that “this thought will reverberate.”
Germany, Europe’s largest economy and the most populous country in the EU, has some of the strictest rules on privacy and data protection in the world. This results partly from its history of surveillance by the Nazis, who collected vast troves of information to sort and murder millions of people, or by East Germany’s secret police to persecute opponents during the Cold War.
Gilbert Kreijger is an editor with Handelsblatt Today. Cathrin Bialek, an editor with Handelsblatt, contributed to this article. To contact the author: [email protected]