Germany clamps down on Facebook’s data tracking

German regulators ordered Facebook to stop collecting data on its users’ activities across the internet without their consent — a landmark ruling that experts say could influence policymakers across the globe.

Germany’s Federal Cartel Office, the country’s top antitrust watchdog, said Facebook should be forced to get explicit permission from its users before sharing data collected from WhatsApp and Instagram to its main Facebook app, arguing that Facebook abused its market dominance to gather information about users.

The regulator was particularly concerned with Facebook’s habit of tracking users and non-users alike across the internet through Facebook ‘like’ and ‘share’ buttons embedded in websites.

If Facebook fails to comply, the cartel office said it could impose fines of up to 10 percent of the company’s annual global revenues, which grew by 37 percent to $55.8 billion last year.

Facebook has an estimated 23 million daily active users in Germany, giving it a market share of 95 percent, according to the Cartel Office which considers Google+ — a rival social network that is being closed down — to be its only competitor.

Antitrust lawyer Thomas Vinje, a partner at Clifford Chance in Brussels, said the ruling had potentially far-reaching implications.

“This is a landmark decision,” Vinje said. “It’s limited to Germany but strikes me as exportable and might have a significant impact on Facebook’s business model.”

Facebook said it would appeal the decision, the culmination of a three-year probe, saying the regulator underestimated the competition it faced, and undermined Europe-wide privacy rules that took effect last year.

“We disagree with their conclusions and intend to appeal so that people in Germany continue to benefit fully from all our services,” Facebook said in a blog post.

The Menlo Park, Calif.-based social network has lately complained that there’s too much negative coverage about its data-gathering.

“Using information across our services also helps us protect people’s safety and security, including, for example, identifying abusive behavior and disabling accounts tied to terrorism, child exploitation and election interference across both Facebook and Instagram,” the company said.

Facebook also said that it cannot have a monopoly on social media because “over 40 percent of social media users in Germany don’t even use Facebook.”

Tech analyst Shelly Palmer told The Post that the Germans’ attempts to wrestle with the social network seem confusing, noting that the regulators did not give instances of harm done by sharing data.

“What are we regulating against right now? Facebook is a natural monopoly, there’s nothing you can do to compete with it,” Palmer said. “I don’t feel like the problem has been well-defined by the regulators.”

Palmer added that even if regulations were put in place to limit the collection of data by huge companies, it would likely not impact Facebook’s dominance.

“If you restrict it now, then the data-rich organizations in the world will remain data rich, the data-poor organizations will remain data poor, and the middle will evaporate,” he said.

Shares of Facebook were down 1.9 percent Thursday morning, trading at $167.27.

With Reuters