germany Facebook’s Small Print Might Be Next Big Antitrust Target

[Jim K Global Moderator]

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Facebook Inc.’s small print may be the next big thing in European antitrust as watchdogs home in on how the world’s biggest social network collects information from users that helps generate vast advertising revenues.

 

Germany’s Federal Cartel Office is examining whether Facebook essentially takes advantage of its popularity to bully users into agreeing to terms and conditions they might not understand. The details that users provide help generate the targeted ads that make the company so rich.

 

In the eyes of the Cartel Office, Facebook is “extorting” information from its users, said Frederik Wiemer, a lawyer at Heuking Kuehn Lueer Wojtek in Hamburg. "Whoever doesn’t agree to the data use, gets locked out of the social network community,” he said. “The fear of social isolation is exploited to get access to the complete surfing activities of users."

 

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“It may be difficult to show that Facebook is really misusing its market position” under antitrust law, said Daniel Wiedmann, an antitrust attorney at P+P Poellath + Partners, in Frankfurt. “It’s likely users accept the terms not because Facebook is the dominant power on that market but because they’re reflecting their preferences."

 

Facebook may have less to fear financially from a Cartel Office probe as, unlike Google, it may not be fined. The current terms of the investigation rule out a financial penalty. Instead,  if it’s found to breach antitrust rules Facebook would face an order to change how it operates.

 

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Full article at Bloomberg Technology

 

Have to say ... Germany's Federal Cartel Office is one cool name.  Not really sure about this whole investigation though.  Facebook has to make revenue somehow ... and people do agree to the terms they've set forth.