German Competition Authority imposes antitrust-based restrictions on Facebook’s collection and processing of user data
On 7 February 2019, the German Federal Cartel Office or Bundeskartellamt (the BKa) issued its decision in the Facebook case. The BKa decided that Facebook had abused its dominant position in
Facebook collects user data not just from activity on its own website but also from a variety of other sources. These sources include on the one hand other Facebook-owned services, such as Instagram and WhatsApp, and on the other
According to the BKa, requiring users of Facebook to consent to the collection of their data on third-party websites and to the linkage of their Instagram and/or Whatsapp data with their Facebook account, as a pre-condition for access to Facebook’s social media platform, is unfair and excessive. This
Voluntary consent implies that the use of Facebook’s social network site may not be made conditional on users consenting to the combination of data from other Facebook-owned applications and/or
In the absence of voluntary consent, the possibility to combine data from these different data sources will need to be considerably restricted. Facebook has to develop a proposal to restrict such data processing (e.g. by imposing restrictions on the amount of data, the purpose of the use, additional control options for users, anonymization, limitations on data storage…) and submit it to the BKa within four months.
Requiring users to submit excessive amounts of data and/or merging significant data sets without voluntary consent from the data subjects can amount to an abuse of a dominant position.
This decision marks the first time a competition authority ruled on a privacy-related abuse of dominance. It is also one of the rare findings of an exploitative abuse of dominance. Most
With 23 million daily active users and a market share of 95 percent, the BKa found that Facebook is dominant in the German market for social networks. The authority considers that services like LinkedIn, WhatsApp, YouTube, Snapchat, Instagram and Twitter, although they may compete with Facebook to some extent or with respect to specific features, are not part of the same relevant market because they mainly meet different consumer needs. The BKa also considered that no significant parallel use of different platforms could be established. Such “multi-homing” can generally have a countervailing effect against platform market power.
The BKa considers that in view of the data-driven business model of social media apps, the combination by Facebook of data sets from its different social media apps and the collection and use of data originating from third-party websites has contributed to strengthening Facebook’s market power.
The BKa qualifies the abuse as the imposition of unfair contractual terms and conditions. It considers that the European privacy and data protection rules can constitute a standard for the
In an initial
In its decision, the BKa has taken what is essentially a data protection issue and qualified it as an exploitative abuse of dominance. This is also reflected in the remedy, i.e. the requirement of specific consent, which is basically what EU personal data protection law (as laid down in the GDPR) already requires. The only aspect of the remedies that appears to go beyond that is the prohibition on Facebook to make the use of its platform (deemed dominant) conditional on the processing of personal data gathered outside that platform, in a “take it or leave it” proposition.