Facebook told to limit data collection on its users

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Yesterday Germany's Federal Cartel Office, the country's antitrust regulator, says that Facebook needs user consent before it merges data from Messenger, WhatsApp, and Instagram.

If the ruling is upheld, Facebook will be required to allow users to specifically approve data collected from other Facebook-owned sources and third-party websites be assigned to their accounts. Facebook users in Germany and elsewhere previously had no way to opt out of the sharing of data between platforms like WhatsApp, Instagram, and third party apps not owned by Facebook.

Facebook hit back at the ruling in a blog post, noting that collecting such data allows it to display better targeted ads to its users, as well as making it easier to identify fake and harmful accounts. Under new European Union privacy rules in force since May 2018, authorities across the 28-nation bloc were given equal powers for the first time to fine companies as much as 4 per cent of annual global sales for the most serious violations.

As everyone has long suspected, WhatsApp and Instragram, after the acquisition by Facebook, are no longer two separate entities and in fact the company combines the user data of the two applications so as to make them even more attractive in the eyes of advertising providers.

The agency's boss Andreas Mundt said: 'As a dominant company Facebook is subject to special obligations under competition law. "While we've cooperated with the Bundeskartellamt for almost three years and will continue our discussions, we disagree with their conclusions and intend to appeal so that people in Germany continue to benefit fully from all our services", said Facebook.

"If users do not consent, Facebook may not exclude them from its services and must refrain from collecting and merging data from different sources".

For example, Facebook's obligatory "tick on the box" to agree to its terms of use was judged to be an inadequate basis for "such intensive data processing".

In concrete terms, Facebook could potentially be forced to change its data collection practices for Germany only because the FCO's jurisdictional competence is naturally limited to Germany while its case rests on an alleged GDPR violation for which there's an EU-wide enforcement mechanism.

During Facebook's Q4 earnings conference call, CEO Mark Zuckerberg said that unifying Facebook's messaging services is a "long-term project" that will continue through 2020 and beyond.

"Users are often unaware of this flow of data and can not prevent it if they want to use the services", Barley told Reuters.

Germany's competition regulator has told Facebook it will have to substantially restrict how it collects and combines data about its users unless they give it explicit consent. Having said this, Facebook's German user base equates to approximately 95% of market share.

The FCO's decision is not final and leaves Facebook with one month to appeal in German court.

It comes after global backlash against Facebook was fuelled by last year's Cambridge Analytica scandal.

'On the other hand, the attractiveness and value of the advertising spaces increase with the amount and detail of user data.

"All companies in the digital information ecosystem that rely on tracking, profiling and targeting should be on notice", Buttarelli added.

The office said many users were not aware that Facebook is able to "collect an nearly unlimited amount of any type of user data from third-party sources".

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