Facebook facing German antitrust investigation

The Bundeskartellamt, Germany’s Federal Cartel Office, has initiated a proceeding against Facebook on suspicion the company is abusing its market dominance to violate data protection laws.

Andreas Mundt, president of the Cartel, said: “Dominant companies are subject to special obligations. These include the use of adequate terms of service as far as these are relevant to the market.

"For advertising-financed internet services such as Facebook, user data are hugely important. For this reason it is essential to also examine under the aspect of abuse of market power whether the consumers are sufficiently informed about the type and extent of data collected."

The watchdog expressed doubts about whether Facebook users were being properly informed about how their data was being used, adding that this could be a violation of German data protection laws.

“Facebook collects a large amount of personal user data from various sources. By creating user profiles the company enables its advertising customers to better target their advertising activities.

“In order to access the social network, users must first agree to the company's collection and use of their data by accepting the terms of service. It is difficult for users to understand and assess the scope of the agreement accepted by them.”

Facebook uses the data it collects from the profiles of its 1.6bn users to generate revenue from targeted advertising.