Published: Sat, February 09, 2019
Markets | By Otis Pena

German regulator bans Facebook from sharing data from WhatsApp, Instagram

German regulator bans Facebook from sharing data from WhatsApp, Instagram

Following a three-year probe into the company, Germany's Bundeskartellamt, or Federal Cartel Office, ruled that Facebook can no longer combine user data from different sources without voluntary consent.

Facebook announced it will appeal the decision, lamenting the "fierce competition we face in Germany" and insisting the company is in compliance with both the GDPR and other European data protection laws.

In addition, Facebook said that the transfer of data between services helps to keep users safe. "The previous practice of combining all data in a Facebook user account, practically without any restriction, will now be subject to the voluntary consent given by the users".

The extent to which Facebook collects, merges and uses data in user accounts constitutes an abuse of a dominant position. By not obtaining sufficient user consent for collecting the data from other apps and sites, the company abused its dominant position in the market and violated European Union personal data protection law, the German regulator said.

The FCO has ordered Facebook to come up with proposals for how it can do this, and if it fails to comply, the regulator will have the capacity to impose fines of up to 10% of the company's annual turnover, a significant hit.

On the other hand, this ruling is not yet legally binding; Facebook has up to a month from now to appeal the decision.

In concrete terms, Facebook could potentially be forced to change its data collection practices for Germany only because the FCO's jurisdictional competence is naturally limited to Germany while its case rests on an alleged GDPR violation for which there's an EU-wide enforcement mechanism. She joked about internet user terms that no-one reads in a Monday speech where she also described the Cambridge Analytica scandal over data gathered from Facebook as "a huge wake-up call".

In a similar vein, Facebook will only be allowed to collate data from third-party websites and link it to a user's account only if they have given consent.

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Antitrust lawyer Thomas Vinje, a partner at Clifford Chance in Brussels, said the Cartel Office ruling had potentially far-reaching implications.

"This is the point we'll continue to make to the Bundeskartellamt and defend these important arguments in court, so that people and businesses in Germany can continue to benefit from all of our services", wrote Facebook.

"We are carrying out what can be seen as an internal divestiture of Facebook's data", said Andreas Mundt, president of Bundeskartellamt.

The regulator said it had not included services such as Snapchat, YouTube or Twitter, and professional networks like LinkedIn and Xing, as being in the market it has considered Facebook to be dominant in because they "only offer parts of the services of a social network and are thus not to be included in the relevant market".

Facebook said the German regulator had confused the company's "popularity" with the concept of being "dominant" in the market for the purposes of competition law.

It will have one month to appeal and four months to send remedies to the Federal Cartel Office. The data in question does not only concern WhatsApp and Instagram, but also all other third-party sources used by Facebook.

It would also soon launch a "clear history" feature, which they claim will be able to show users the "information [Facebook] receive from the websites and services who use our business tools" and "disassociate it from your account".

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