German competition policy agency investigates Facebook for infringement of DP rules

01/04/2016

The German Bundeskartellamt has initiated proceedings against Facebook on suspicion of the company having abused its dominant market positon by infringing data protection rules. The German competition policy agency is investigating Facebook Inc., US, the Irish subsidiary of the company and Facebook Germany GmbH, Hamburg. The Bundeskartellamt is investigating suspicions that Facebook could be imposing unfair conditions on users.

Andreas Mundt, President of the Bundeskartellamt 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 Bundeskartellamt says that 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. There is considerable doubt as to the admissibility of this procedure, in particular under applicable national data protection law. If there is a connection between such an infringement and market dominance, this could also constitute an abusive practice under competition law.

The European Data Protection Supervisor is also active in this field of linking data protection, consumer and competition law. Read more in the next issue of PL&B International Report, to be published on 7 April. To subscribe, go to www.privacylaws.com

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