Facebook accused of abusive data collection by Bundeskartellamt

According to a preliminary legal assessment by the German regulator, the social network is abusing its dominant position by collecting user data from third-party sources. Facebook denies this and declares that the authority paints an "inaccurate picture".

(Source: pixabay.com)

Björn GreifEditor

Did you ever wondered why you often see ads on Facebook for products you’ve been looking for on the web just before? This is made possible by so-called trackers, which are integrated in websites and monitor your browsing behavior. Facebook’s trackers are present on 27.1 percent of all websites in order to learn as much as possible about your interests and to use this information for advertising purposes. Only Google’s tracker reach, with a share of 60.3 percent, is even greater according to an international study conducted by Cliqz and Ghostery called “Tracking the Trackers: Analyzing the global tracking landscape with GhostRank.” More than 144 million page loads were examined during the analysis.

Since 2016, the Bundeskartellamt is investigating whether Facebook has a dominant position in Germany and whether it is abusing this position as a “data-driven company.” Now, the regulator has informed the company in writing of its preliminary legal assessment in the abuse of dominance proceeding. Based on the current stage of the proceedings, the authority assumes that Facebook is dominant on the German market for social networks. The authority holds the view that Facebook is abusing this dominant position by making the use of its social network conditional on its being allowed to limitlessly amass every kind of data generated by using third-party websites and merge it with the user’s Facebook account. These third-party sites include firstly services owned by Facebook such as WhatsApp or Instagram, and secondly websites and apps of other operators with embedded Facebook APIs. Andreas Mundt, President of the Bundeskartellamt, explains:

We are mostly concerned about the collection of data outside Facebook’s social network and the merging of this data into a user’s Facebook account. Via APIs, data are transmitted to Facebook and are collected and processed by Facebook even when a Facebook user visits other websites. This even happens when, for example, a user does not press a “like button” but has called up a site into which such a button is embedded. Users are unaware of this. And from the current state of affairs we are not convinced that users have given their effective consent to Facebook’s data tracking and the merging of data into their Facebook account. The extent and form of data collection violate mandatory European data protection principles.

Terms of service partly violate data protection regulations

According to the authority’s preliminary assessment, when operating this business model Facebook, as a dominant company, must consider that its users cannot switch to other social networks. Participation in Facebook’s network is conditional on registration and unrestricted approval of its terms of service. Users are given the choice of either accepting the “whole package” or doing without the service. According to the Bundeskartellamt’s preliminary assessment, Facebook’s terms of service are at least in this aspect inappropriate and violate data protection provisions to the disadvantage of its users.

Facebook rejects allegations of a dominant position. In a statement titled “Popularity Does Not Equal Dominance” Yvonne Cunnane, Head of Data Protection for Facebook Ireland, wrote: “Bundeskartellamt’s preliminary report paints an inaccurate picture of Facebook.” A dominant company operates in a world where customers don’t have alternatives. Taking a look at the average smartphone home screen shows that Facebook does not have a dominant position in the market, Cunnane says. The average person now uses seven different social communication apps or services like Snapchat, YouTube or Twitter. The services cited by Cunnane had, however, been excluded by the Bundeskartellamt in the abuse proceedings, because they serve a complementary need.

“Facebook has huge amounts of personalised data at its disposal”

In this proceeding the Bundeskartellamt focuses on the collection and use of user data from third party sources. The proceeding does not concern the collection and use of data on the Facebook network itself. The authority leaves explicitly open whether this also constitutes a violation of data protection provisions and the abuse of a dominant position.

Facebook's trackers are present on numerous websites (Screenshot: WhoTracks.me).

The Bundeskartellamt is closely cooperating with data protection authorities as regards the data protection aspects of the case. Andreas Mundt: “Data protection, consumer protection and the protection of competition interlink where data, as in Facebook’s case, are a crucial factor for the economic dominance of a company. On the one hand the social network offers a free service, on the other it offers attractive advertising space, which is so valuable because Facebook has huge amounts of personalised data at its disposal. In these entrepreneurial activities Facebook has to comply with rules and laws.”

Final decision not before mid-2018

Regarding data collection, Facebook’s data protection manager refers to the General Data Protection Regulation (GDPR), which will come into effect in May 2018. The company “will of course comply with the GDPR” and will be introducing “additional controls”. Facebook also wants to provide “more education about how we protect people’s data and security”. According to Cunnane, Facebook is confident that they will be able to address the questions posed by Bundeskartellamt.

Facebook now has the chance to comment on the allegations and provide justification for its conduct or offer possible solutions. Possible outcomes of the administrative proceeding are the termination of the case, the offer of commitments by the company or a prohibition by the competition authority. A final decision on the matter is not expected before early summer 2018.

In the universe without borders known as cyberspace, national data protection laws and regulation will never be able to form an invincible shield from the omnipresent trackers. For this reason, Internet users who want to protect their privacy have to take matters into their own hands. One simple and efficient step they can take is to use anti-tracking tools like Ghostery. Tracking protection is also part of the Cliqz Browser. Ghostery is available for free download as an extension for all common browsers. The free Cliqz Browser is available for Windows and macOS as well as Android and iOS.