German Cartel Office Probing Facebook
The EU’s anti-trust law is literally busting US tech firms with severe penalties for violating consumer rights, competitor rights, and privacy rights. At least three of the major US tech firms; Apple, Google and (now) Facebook is under fire for various practices that go against EU laws. While Google’s skewed search results for Google Shopping is still fresh, Facebook is being probed by Germany for extorting customer information.
Facebook has a notorious reputation of trading user data for ads and profitability. In fact, it is one of the major cause of concern for critics of the platform. Even with its strong privacy settings, the network is not entirely secure for users. People repeatedly complain of being bombarded with ads and information that they do not want to see. These interfere with their effective use of the medium, but most cannot simply leave the platform because of their dependency for business, communication, and social integration.
Germany’s Federal Cartel Office is investigating the platform’s terms and conditions which it believes, ‘bullies users into agreeing to terms and conditions they might not understand.’ It should be noted here that Facebook has a complicated system of privacy and account settings deeply hidden behind layers of options which most naïve users are never really aware of. Only the tech-savvy tend to be able to understand the privacy options of the social network. Further problems arise when the network enforces users to agree with its data use or be locked out of the network.
What Are the Main TOS Clauses?
Users would never think of going through a 14,000-word term of service and data use policy when signing up for a social network. No one really takes it seriously to actually read through the lengthy agreement. And this is where the Cartel Office believes Facebook fools its users. Whatever pictures or content you post on Facebook, you have allowed them to use any way they see fit. Your private information can be used to create targeted ads, provided to another organization or agency if needed and finally your content remains with Facebook even if you have deleted your account. This may not be much of a concern for naïve users, but for those who understand it, know that the moment they sign up on a social network, they have given up any and all privacy. You literally leave footprints of you all over the web – data that can be used by anyone and everyone. Imagine years later, you see an unpleasant picture of you lurking on the web. That’s the kind of problem users encounter when they sign up to networks like Twitter, Facebook or Linkedin.
The Locking Out Warning
The following warning became part of Facebook’s updated TOS in January 2015.
This essentially means that 1.32 billion people using Facebook, ‘HAVE,’ to comply with the company’s data use demands and this is what Germany’s Cartel Office finds offensive. With this new policy, experts say that Facebook intends to gather users’ details so that they can sell more advertising at higher rates and therefore be able to earn lucrative profits over their ability to, ‘target ads.’ Companies would be ready to pay an arm and a leg just to be able to reach the right audience through targeted ads and this is Facebook’s only platform for big money.
Furthermore, Facebook will also ask to be allowed to track your location using your GPS, Bluetooth, and Wifi signals (you can deny this). With location tracking, you will be getting localized target ads which will be attractive enough for local businesses to start investing in Facebook ads. If you’ve ever used Facebook’s Ad Manager, you would know how easy it is to select your choice of audience. How does Facebook make it possible to give demographic specific ads? By using your data, by allowing your friends to track your movements, by giving you plenty of options to continuously feed in personal information. One of the clauses even states, “company may use information on location to tell you and your friends about people or events nearby, or offer deals to you that you might be interested in.” The sponsored ads that you’re seeing, the local events or offer deals popping up on your newsfeed are all the results of targeted ads obtained through your personal information.
The German Probe
While the Google case is about fair competition, Facebook’s case is about users’ personal information which is becoming a concern for the EU as it starts to probe into the practices of tech companies. According to the Independent news report, ‘the Cartel Office should have left the question of whether the company abuses users’ data to privacy regulators. Those watchdogs, once relatively toothless, will be empowered next year when tougher EU data privacy rules take effect, allowing them to levy fines of as much as 4 percent of global annual sales.’ The problem, however, is difficult to tackle especially since users prefer the social platform and may not have a problem with its TOS. In fact, many find it easy to have targeted ads to match their purchase needs. People usually end up liking pages or sponsored ads that enable them to make better purchase decisions. And though the EU may feel it be a violation of user privacy, it’s difficult to hold a case when users themselves have no issues with it.
In the light of the complexity of the situation, the Cartel Office has ruled out penalizing Facebook and may insist on the company changing the way it operates or face a ban. This way though, the impact on Facebook may be more drastic than a mere fine.