Facebook Model under Attack Despite Conforming to EU Rules

Germany’s anti-trust regulator gave Facebook an ultimatum last week: stop tracking every move its German users make online and get their consent first, or it will lose the right to operate in the country. Facebook has 30 days to appeal.

According to a story in Wired, Germany’s laws give it the right to regulate the website and force it to submit to more stringent requirements in how it operates. The European Union already fined the company for its release of private information to Cambridge Analytica for political advertising and required Facebook to follow new privacy guidelines. However, Germany’s ruling is significant because it would essentially reveal how Facebook profits from German users’ data.

“Facebook’s massively lucrative advertising model relies on tracking its one billion users—as well as the billions on WhatsApp and Instagram—across the web and smartphone apps, collecting data on which sites and apps they visit, where they shop, what they like, and combining all that information into comprehensive user profiles,” writes Emily Dreyfus in the Wired story. “Facebook has maintained that collecting all this data allows the company to serve ads that are more relevant to users’ interests. Privacy advocates have argued that the company isn’t transparent enough about what data it has and what it does with it.”

The New York Times reported that the “novel antitrust argument” hinges on the company’s dominant social media presence,  which it uses to “coerce people into giving up their personal data. The social network’s terms of service, regulators said, had unfairly forced people to make an all-or-nothing choice — between submitting to unlimited data collection by the company or not using Facebook at all.”

Politico called it a “landmark” decision because it requires Facebook to get clear permission from users, apart from the standard use agreement no one reads and everyone clicks, that they consent to allow Facebook to combine data from their WhatsApp and Instagram accounts, as well as third-party websites with their Facebook data for marketing purposes.

The ruling could have far-reaching effects because it may force other internet companies to follow tougher rules on how they collect and inform users of how data is collected, according to the Times story, which pointed out that German regulators are reviewing Amazon’s terms of use, too.