Facebook’s legal problems in Europe are far from over, and if Germany has its way with its newest inquiry into Facebook’s business practices, we may see the first case where a watchdog builds an antitrust case based on a tech company’s privacy policy.
That’s never been done before, but Germany argues there’s a link between complex privacy policies that users hardly understand and anti-competitive behavior, at least when it comes to Facebook.
The giant social network is currently used by more than two billion people around the world. Because it’s so big compared to other rivals, Facebook may be able to get away with privacy policies that allow it to make more money from highly targeted ads. Germany says that Facebook “extorts” its users, forcing them to agree to these privacy policies or risk to be cut out from their connections.
“Whoever doesn’t agree to the data used, gets locked out of the social network community,” lawyer Frederik Wiemer explained. “The fear of social isolation is exploited to get access to the complete surfing activities of users.”
Facebook’s privacy policy allows it to harvest lots of personal data to offer advertisers targeted ads that have a higher chance of converting a person into a customer.
Germany’s Federal Cartel Office seems to believe that because Facebook is so big, it can convince its users to accept any terms a lot easier than smaller players. Thus, Facebook could face an antitrust inquiry.
However, Germany may have a tough time linking privacy policies to antitrust actions. But if Germany succeeds, the European Union might be the next body to come after Facebook. The EU just handed Google a record-breaking fine over antitrust practices, and Google still has two more similar inquiries to deal with.
Regardless of whether it influences the European Commission or not, the German probe might not seek punitive damages against Facebook, at least not the financial kind. But if found guilty, Facebook might have to make changes to the way it handles user privacy, which could affect its bottom line.
