Facebook Faces Antitrust Investigation in Germany

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The federal competition authority (Bundeskartellamt) in Germany is investigating Facebook (NASDAQ:FB) based on its suspicion that the company abused its dominant position in the social networking market.

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According to the Bundeskartellamt, its investigation is focused on how Facebook’s subsidiary in Ireland and Germany used its specific terms of services pertaining to users’ data.

The German federal competition authority suspected that Facebook’s terms of use are in violation of data protection laws. There is a possibility that the company abused its dominant position in the social network market by using of unlawful terms and conditions.

Facebook users agreed to the terms and conditions including the collection of their data, which the company uses for targeted advertising.  The German federal competition authority noted that it is difficult for users to understand and assess the scope of the company terms and conditions.

“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,” according to the Bundeskartellamt.

Facebook terms and conditions under examination

The Bundeskartellamt said it would examine the company’s terms and conditions, and other issues. It aims to find out the extent of the connection between the social network giant’s dominant position and the use of possible unlawful clauses.

“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 also to examine under the aspect of abuse of market power whether the consumers are sufficiently informed about the type and extent of data collected,” said Andreas Mundt, President of the Bundeskartellamt.

The Bundeskartellamt is working closely with relevant entities in Europe regarding its investigation including the European Commission and other competition authorities of the EU member states as well as data protection authorities.

A spokesperson for Facebook said, “We are confident that we comply with the law, and we look forward to working with the Federal Cartel Office to answer their questions.”

Germany urged Facebook to delete hate speech

Facebook CEO Mark Zuckerberg recently visited Germany and met with Peter Altmaier, the Chief of Staff of Chancellor Angela Merkel, regarding the deletion of hate speech on its platform.

Altmaier believed that Zuckerberg understood the importance of Germany’s demand to remove illegal content on Facebook. According to him, their meeting was “very good and constructive.”

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