What's going on?
Germany’s competition regulator has ruled that the way Facebook is collecting users’ data from third parties (e.g. “Likes” on non-Facebook websites) to enhance their user profiles is abusing its dominant market position. Unsurprisingly, Facebook has described the ruling as “inaccurate”.
What does this mean?
Germany’s competition regulator’s preliminary ruling found that Facebook has a dominant position in Germany’s social media market (tweet this) (according to Hootsuite and We Are Social, 41% of Germans have an active Facebook account). Therefore, in forcing users to accept terms of service that allow Facebook to access and use data from related platforms (e.g. WhatsApp and Instagram) and third parties who are using Facebook components (e.g. the famous “Like” button), it may be abusing its dominance – and breaking local data privacy rules.
Facebook believes that users have a choice in how to socially engage online – it’s just one option, which means it isn’t dominant in Germany.
Why should I care?
For you personally: The trace you leave when surfing the web is big money.
The data you generate using social media and while browsing the internet has incredible value to companies which harvest and sell it to advertisers. From May 25th, 2018, the General Data Protection Regulation (GDPR) law comes into effect in Europe, meaning you’ll have to opt-in explicitly to having your personal data collected and potentially shared, and you’ll have the right to request that any company deletes all of your personal data.
The bigger picture: A target on the back of companies selling targeted ads in Europe.
The privacy and data laws in Europe are becoming stricter, making it harder for companies to collect data and sell targeted ads. GDPR is the latest example of this. Falling afoul of this new law comes with fines of up to either €20 million or 4% of global revenues (whichever is greater) – Facebook’s 2016 revenue was almost $28 billion!