Facebook is facing a new antitrust probe in Europe, as German watchdog Bundeskartellamt suspects the company is abusing its dominant position.
Germany's competition watchdog believes Facebook is too heavily relying on its dominant market position to get users to share too much personal information. The Bundeskartellamt believes Facebook's terms of use could be in violation of data protection rules, so it opened an antitrust investigation to look into the matter.
This is not the first time Facebook has faced such suspicions in the country. Just a few days ago, a German court slapped the social networking company with a $109,000 (100,000 euros) fine over an intellectual property clause. The case in question referred to Facebook's failure to tackle Germany's intellectual property concerns in a proper manner, claiming that its terms and conditions violate consumer rights.
"Dominant companies are subject to special obligations. These include the use of adequate terms of service as far as these are relevant to the market," says Bundeskartellamt President Andreas Mundt. "For advertising-financed internet services such as Facebook, user data are hugely important. For this reason it is essential to also examine under the aspect of abuse of market power whether the consumers are sufficiently informed about the type and extent of data collected."
The Bundeskartellamt further explains that Facebook collects vast amounts of personal user data, from various sources. User profiles are one source, and by creating them Facebook is helping its advertising customers to improve the way they target their advertising activities. However, Facebook may be forcing users' hand when it comes to creating those profiles and filling them up with all sorts of personal info.
Users who want to access Facebook have to agree that the social network will collect and use their data, and they do so by agreeing with the terms of use. However, the watchdog is raising concerns that Facebook makes it hard for users to properly comprehend the extent of the permissions they are granting the network.
"It is difficult for users to understand and assess the scope of the agreement accepted by them," explains the Bundeskartellamt. "There is considerable doubt as to the admissibility of this procedure, in particular under applicable national data protection law. If there is a connection between such an infringement and market dominance, this could also constitute an abusive practice under competition law."
The German competition watchdog is targeting Facebook's branches in Ireland and Hamburg, Germany, in this probe.
Facebook, for its part, denies any allegations of wrongdoing and claims it fully complies with the law. The company says it will cooperate with the Federal Cartel Office to clear this matter and answer any questions regarding its practices.
