German competition authority is investigating Facebook terms of use

Mar

3

2016

The Bundeskartellamt announced that it has begun an investigation into Facebook, because the regulator suspects that the company abused its dominant market position. This would make the company by violating privacy laws with its terms of use.

The German regulator indicates that not every wrongful conduct of a dominant undertaking is the subject of an investigation. In the case of Facebook would, however, there may be a link between the dominant position in the market and the use of unlawful terms of use, which may be unreasonable and unfair to consumers. For users, it would be difficult to estimate what conditions they accept exactly as they create a Facebook account.

The President of the Bundeskartellamt, Andreas Mundt, argues that dominant companies have special obligations when it comes to the appropriate terms of use that are relevant to the market. Facebook is able by collecting personally targeted ads to show to users and has since then also from income. In that case it would be the more important that users know exactly with which they agree. If there is a link between the violation of privacy laws by unlawful conditions and a dominant position in the market of social networks, which can mean that competition law is violated.

In January said Commissioner Margrethe Vestager already warning that the collection of personal data in breach of competition law can be. The German regulator appears this warning now actually turn into an investigation. The question is whether supervisors of other Member States will follow the German example. A fine for infringement of European competition law can in some cases up to ten percent of the annual turnover of a company.

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