Facebook’s conduct “exploitative abuse” says Germany’s competition regulator


11/02/2019

Germany’s Bundeskartellamt, the national competition regulator, says that the extent to which Facebook collects, merges and uses data in user accounts constitutes an abuse of a dominant position, and it is imposing restrictions on Facebook’s processing of user data.

The authority announced on 7 February its decision that Facebook has no effective justification for collecting data from other company-owned services, like WhatsApp and Instagram, and Facebook Business Tools or for assigning these data to the Facebook user accounts.

Andreas Mundt, President of the Bundeskartellamt said: “As a dominant company Facebook is subject to special obligations under competition law. In the operation of its business model the company must take into account that Facebook users practically cannot switch to other social networks. In view of Facebook’s superior market power, an obligatory tick on the box to agree to the company’s terms of use is not an adequate basis for such intensive data processing. The only choice the user has is either to accept the comprehensive combination of data or to refrain from using the social network. In such a difficult situation the user’s choice cannot be referred to as voluntary consent.”

Facebook’s terms of service and the manner and extent to which it collects and uses data are in violation of the European data protection rules to the detriment of users, the Bundeskartellamt says. As there is an interface between competition law and data protection law, it has been in close cooperation with EU data protection authorities.

In the authority’s assessment, Facebook’s conduct represents above all a so-called exploitative abuse. Dominant companies may not use exploitative practices to the detriment of the opposite side of the market, i.e. in this case the consumers who use Facebook.

Andreas Mundt: “Today data are a decisive factor in competition. In the case of Facebook they are the essential factor for establishing the company’s dominant position. On the one hand there is a service provided to users free of charge. On the other hand, the attractiveness and value of the advertising spaces increase with the amount and detail of user data. It is therefore precisely in the area of data collection and data use where Facebook, as a dominant company, must comply with the rules and laws applicable in Germany and Europe.”

Facebook has one month to appeal the decision to the Düsseldorf Higher Regional Court.

See Bundeskartellamt press release.



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