Germany clamps down on Facebook’s data gathering

Landmark case blocks social network from pooling collected data without user consent

Andreas Mundt, president of Germany’s Federal Cartel Office, said the authority could issue recurring penalties of between €1 million and €10 million. Photograph: Wolfgang Rattay/Reuters

Andreas Mundt, president of Germany’s Federal Cartel Office, said the authority could issue recurring penalties of between €1 million and €10 million. Photograph: Wolfgang Rattay/Reuters

 

Germany’s antitrust watchdog on Thursday blocked Facebook from pooling data collected from Instagram, its other subsidiaries and third-party websites without user consent in a landmark decision on internet privacy rights and competition.

The Federal Cartel Office (FCO) said it was tackling what it described as the Silicon Valley company’s “practically unrestricted collection and assigning of non-Facebook data” to user accounts.

In a press conference in Bonn, the German authorities said that Facebook needed the “voluntary consent” of users to pool data from other services with its own Facebook user data.

The FCO also said Facebook needed consent to collect data from third-party websites outside its own ecosystem. “If consent is not given...Facebook will have to substantially restrict its collection and combination of data,” the cartel office said.

Facebook said it disagreed with the conclusions and intended to appeal “so that people in Germany continue to benefit fully from all our services”.

Antitrust watchdog

The antitrust watchdog, which opened its probe three years ago, gave the company four months to submit a detailed policy on how it planned to implement changes and 12 months until it had to be fully compliant.

Currently, Facebook uses data from Instagram, including what users click and post, to personalise and target ads users see on the Facebook app, and vice versa.

It also collects data from a host of third-party apps outside its ecosystem – apps such as Spotify, Kayak or TripAdvisor, which have embedded Facebook trackers. The data gleaned, such as details on flights booked, is also used to target ads in the Facebook app. Blocking cross-app data sharing could significantly affect the Californian company’s ad sales proposition.

New data

Andreas Mundt, president of the Federal Cartel Office, compared the decision to a “break-up of Facebook with regard to data-processing”. But this only applies to new data which Facebook may collect in future, not to the stock of pooled user data already assembled by the company.

Mr Mundt said the authority could issue recurring penalties of between €1 million and €10 million. “I am confident that we will can successfully execute our decision,” he said, adding that the obligation to bring the business model in line with antitrust law was more relevant than financial penalties. – Copyright The Financial Times Limited 2019