Facebook to face 'more radical' fines than EU's Google case

A German regulator alleges Facebook of taking advantage of its users to amass information that is instrumental in generating advertising revenues.

facebook gag order

Just a week ago when Google was fined by the European Commission with US$2.4 billion, Facebook could be the next Internet firm in the hot water. The 2 billion population social network is allegedly taking advantage of its users to amass information that is instrumental in generating advertising revenues.

The German Federal Cartel Office is reportedly looking at Facebook for using its platform to force users to agree with the fine print of its terms and conditions which they might not understand. Every bit of information that a user provides to Facebook is significant to target relevant ads.

According to the Cartel Office's lawyer Frederik Wiemer, Facebook is extorting data from the users. "Whoever doesn't agree to the data use, gets locked out of the social network community," states Wiemer. "The fear of social isolation is exploited to get access to the complete surfing activities of users."

Germany's Federal Cartel Office is challenging the confines of European Union (EU) arm's anti-trust law. Dechert lawyer Alec Burnside stressed that Facebook charge could be "more radical" than EU's Google case because Germany's Federal Cartel Office considers "privacy concerns can be anti-trust concerns".

Last week, Cartel Office's president Andrea Mundt said Facebook's case centres on the questions relating to the current fair competition in the digital landscape and down the line.

Facebook now has 2 billion users and is generating approximately US$27 billion in revenue in 2016. It is still facing multiple court battles over privacy issues brought by merging WhatsApp messenger application and its platform. In May, it was fined by the EU for presenting a misleading merger review of the WhatsApp deal.

The European Commission has been criticised by large American firms for anti-trust violations. In 2016, the Commission ordered Apple to pay US$19.3 billion in back taxes, and last week Google was fined US$2.7 billion for slanting Google search results in its favour.

This article was first published on July 3, 2017
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