The people behind “move fast and break things” are about to get disrupted themselves.
The German regulation body that monitors competition has ordered Facebook to stop some of its core activities, unless it gets more explicit user consent (via the BBC). That includes combining the data Facebook gains about users from external websites into their backend Facebook profiles. As well as combining the accounts of people on Facebook-owned companies, including WhatsApp and Instagram.
While the new orders concern user privacy, the body is actually instituting its terms because they say the way Facebook has consolidated user information across websites and social platforms has given them an unfair competitive advantage.
“The combination of data sources substantially contributed to the fact that Facebook was able to build a unique database for each individual user and thus to gain market power.”
Facebook released a blog post Thursday directly refuting the order, entitled “Why We Disagree With the Bundeskartellamt” (the name of the agency). In the post, it defends its actions on both privacy and competitive grounds. And, Facebook says that the competition agency shouldn’t have jurisdiction over this matter.
“The GDPR specifically empowers data protection regulators – not competition authorities – to determine whether companies are living up to their responsibilities,” Facebook writes. “The Bundeskartellamt’s order threatens to undermine this, providing different rights to people based on the size of the companies they do business with.”
Facebook also included a handy chart to show that it really does face a lot of competition. But the chart does make one wonder into which little box — messages? news? shopping? videos — Facebook places itself. Maybe, all of them?
Facebook has one month to refute and petition for changes to the order. Then, according to the BBC, the government body’s order will become law, and Facebook will be compelled to make changes.
At around 40 million users, according to industry estimates, Germany is far from Facebook’s largest market — that falls to India, at 300 million. But as US Facebook users experienced with the GDPR, it’s difficult for tech companies not to extend the privacy and data collection changes tech companies make in one market to others; why make a change that benefits consumers’ privacy to a part instead of just the whole?
This also isn’t the first time Facebook has been scrutinized on anti-competitive grounds. Lawmakers and consumer groups have recently been beating a drum to “break up Facebook,” arguing that its acquisition of companies like Instagram and WhatsApp constitutes a monopoly.
The order about combining user data between services is also notable because Facebook CEO Mark Zuckerberg recently confirmed his company’s plan to more deeply integrate the backend of Facebook Messenger, Instagram DMs, and WhatsApp, into one. This was an initiative he emphasized on his company’s Q1 earnings call. And a New York Times report stated that Zuckerberg himself was behind the plan. The Irish Data Protection commission is also scrutinizing this plan.
This time, Zuck might just not get his way.