German Antitrust Authorities Prepare Sanctions Against Facebook

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The Federal Cartel Office (Bundeskartellamt) in Germany is preparing possible sanctions against U.S. social media giant Facebook, the newspaper “Rheinische Post”, reported on Tuesday.

The national competition watchdog is accusing Facebook of indiscriminately collecting and using data from German users without their knowledge or consent.

“We criticise the fashion in which the company collects and uses personal data as a potential abuse of market power,” Andreas Mundt, President of the Federal Cartel Office, told “Rheinische Post”.

According to Mundt, users’ data were systematically collected by Facebook from its own website, as well as from nominal third sources such as Instagram and Whatsapp, without letting them be aware of the practice and thus have an opportunity to object.

The Federal Cartel Office informed the U.S. Menlo Park-based company about its related antitrust concerns before Christmas.

Mundt said that he would “wait and see how Facebook reacts to our criticism”.

The Federal Cartel Office would then decide whether sanctions needed to be applied.

Unless the social network proposed a solution of its own, German antitrust authorities would have no other choice than to prohibit the illicit “collection and use of data from third sources without express consent of the users.”

The President of the Federal Cartel Office expressed confidence that the so-called “effects doctrine” in competition law would enable it to apply sanctions on Facebook, whose headquarters is abroad.

Under the doctrine, which has been the source of controversy among international lawyers, a state is entitled to change behaviour which occurs outside of its own jurisdiction when it has domestic implications.

“We can effectively take action against a violation, if it has effects within the German Federal Republic,” Mundt argued.

Following a preliminary assessment, the Federal Cartel Office already complained about Facebook’s data collection practices back in mid-December.

German antitrust authorities consider the U.S. Company to occupy a dominant market position in Germany, a claim denied by the social network.

The sanction threatened against Facebook draws further attention to a growing desire by European governments to subject digital business to more effective regulation.

In particular, senior officials on the continent have repeatedly attacked what they view as tax evasion practices, privacy law breaches and abuses of market power by business giants like U.S.-based Google, Facebook and Amazon.

Several member states have consequently announced related joint policy initiatives across the EU during discussions on the digital economy held under the framework of Estonia’s recent presidency of the European Council in 2017.

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