German antitrust authorities restrict Facebook data use

German antitrust authorities ruled Thursday against Facebook combining user data from different sources, saying it was exploiting its position as a dominant social media company in violation of European regulations.

The Federal Cartel Office, or Bundeskartellamt, said Facebook was guilty of "exploitative abuse" by forcing users to agree allow it to collect data from other Facebook-owned services like WhatsApp and Instagram, as well as third-party websites through the "Like" or "Share" features, and assign it to a user's Facebook account.

"On the one hand there is a service provided to users free of charge," Cartel Office president Andreas Mundt said. "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 said it rejected the decision, and would appeal within the one-month frame before it becomes final.

If the ruling is upheld, Facebook will be required to allow users to specifically approve data collected from other Facebook-owned sources and third-party websites be assigned to their accounts. The decision is not about Facebook's processing of data generated by its own site, which the Cartel Office acknowledged is the business model for data-based social networks like Facebook.

Facebook said that with its ruling, the Cartel Office underestimates the competition Facebook has in Germany from YouTube, Snapchat, Twitter and others in calling it a "dominant company," misinterprets Facebook's compliance with regulations, and undermines mechanisms provided for in European law ensuring consistent data protection standards.

"The Bundeskartellamt's decision misapplies German competition law to set different rules that apply to only one company," Facebook said.

It noted that it had been cooperating with the office in its investigation since 2016, and will continue discussions, but would also "defend these important arguments in court."

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 cannot switch to other social networks."

"The only choice the user has is either to accept the comprehensive combination of data or to refrain from using the social network," it said in its judgment. "In such a difficult situation the user's choice cannot be referred to as voluntary consent."