FACEBOOK ABUSED DOMINANT POSITION, SAYS GERMAN WATCHDOG
Germany's competition watchdog has found that Facebook abused its
dominant market position, challenging the US social network's model of monetizing the personal data of its 2 billion users worldwide through targeted
advertising.
Presenting preliminary findings of its 20-month-old probe, the Federal
Cartel Office said Facebook held a dominant position among social networks - a
characterisation the company dismissed as ‘inaccurate’.
The case is being closely watched in Germany, where concerns over data
privacy are strong due to a history of state surveillance under Nazi and
Communist rule. Facebook has been running an ad campaign to try to allay those
fears.
Separately, Berlin will introduce a law in the new year imposing fines
of up to 50 million euros ($59 million) on social media platforms that fail
quickly to remove posts that propagate hate speech - a crime in Germany.
The anti-trust authority objected to Facebook's requirement that it
gain access to third-party data when an account is opened - including from its
own WhatsApp and Instagram products - as well as how it tracks which sites its
users access.
‘Above all we see the collection of data outside the Facebook social
network and its inclusion in the Facebook account as problematic,’ cartel
office President Andreas Mundt said in a statement.
This happens when a Facebook user views a page with a Facebook 'Like'
button embedded in it - even if they don't click on the button itself, he
added.
On Monday, France's data privacy watchdog said it may fine WhatsApp,
the encrypted messaging app, if it does not comply with an order to bring its
sharing of user data with Facebook into line with French privacy law.
Responding, Facebook said the cartel office had ‘painted an inaccurate
picture’ but said it would cooperate with the German investigation.
‘Although we are popular in Germany, we are not dominant,’ its head of
data protection, Yvonne Cunnane, said in a blog post.
About 41 per cent of Germans have active Facebook accounts, below the
66 per cent in the United States, 64 per cent in Britain and 56 per cent in
France, according to a survey by social media agencies Hootsuite and We Are
Social.
‘A dominant company operates in a world where customers don't have
alternatives,’ said Cunnane, adding that the average smartphone user now
accesses seven different communications apps or services.
Facebook, founded by CEO Mark Zuckerberg and fellow Harvard students in
2004, has grown exponentially to become the world's top social network and is
valued on the stock market at $525 billion.
It has done so by providing free access to users while analysing their
online behaviour to target advertising, where its revenues rose by half in the
third quarter to $10 billion.
The probe by the German cartel office has raised eyebrows because some
European Union officials see it as encroaching into an area properly overseen
by data-protection authorities under EU-wide rules.
One German data-protection official said the investigation was
legitimate because data protection and preventing abusive competition were ‘two
sides of the same coin’ when it comes to social networks.
‘Facebook has built up an intricate network for unlimited data
collection and compilation that is totally opaque,’ said Johannes Caspar, data
protection commissioner for the city-state of Hamburg.
‘This fundamentally collides with the right to self-determination of
those affected.’
In her blog post, Cunnane noted that Facebook abided by European
data-protection laws and would comply with a new General Data Protection
Regulation when it comes into force in the EU in May 2018.
The cartel office, which said it was working closely with data- and
consumer-protection bodies, expects to publish the final results of its
investigation into Facebook in the early summer of 2018 at the earliest.
News source : Reuters
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