The Bundeskartellamt, Germany's Federal Cartel Office, which deals with antitrust issues, has ruled that Facebook will no longer be able to merge users’ data from Facebook, Instagram, WhatsApp and other properties under one account without voluntary consent.
This ruling is a blow to Facebook, which is planning to unify the Facebook Messenger, Instagram and WhatsApp backends, according to a January report from Reuters.
The Federal Cartel Office ruled that Facebook will be able to continue gathering user data with various services and applications, but none of that data can be combined under a single account without the user’s voluntary consent. This should apply not just to data gathered from Instagram, WhatsApp, Like buttons on various websites or the Facebook Pixel analytics service tracking you across the web, but also to Facebook’s data bartering with data brokers, device makers and other institutions. Facebook will no longer be able to associate any of that data to a German user's Facebook account without their voluntary consent.
The use of “voluntary” here is important because it means Facebook can’t try to coerce users into agreeing to the data merger. The regulator’s order explicitly said that Facebook can not block users from using its services if they disagree with the data merger from different sources.
The German regulator also noted that the merger of user data from all sorts of sources is what has allowed Facebook to consolidate its market position. The regulator declared Facebook a monopoly due to the company owning over 95 percent of the social media market in Germany. However, the agency noted that while SnapChat, YouTube, Twitter and LinkedIn aren't included in this stat, "even if these services were included in the relevant market, the Facebook group with its subsidiaries Instagram and WhatsApp would still achieve very high market shares that would very likely be indicative of a monopolisation process." In Germany, monopolies have to be obey a different sort of rules, governed by antitrust laws.
The agency also accused Facebook of abusing this market monopoly by telling users that when they agree to the Terms of Service for the Facebook platform they also agree to having data collected about them from other sources associated with their accounts. The regulator said this is against European Union data protection laws.
Furthermore, this exploitative use of data puts Facebook’s competitors at a disadvantage, according to Andreas Mundt, president of Germany's Federal Cartel Office:
“Today data are a decisive factor in competition. In the case of Facebook they are the essential factor for establishing the company’s dominant position. On the one hand there is a service provided to users free of charge. 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.”
The German agency’s ruling is not yet final, and Facebook has one month to appeal to the to the Düsseldorf Higher Regional Court.
