Facebook has a giant, Europe-sized legal problem
Europe continues to be a giant pain in Facebook’s app.
Germany and France this week both hammered Facebook for its data practices, though in different ways.
Germany’s competition regulator declared on Monday that Facebook is using its dominance in the personal data market to squelch competition and took issue with Facebook’s tracking of users outside of its social network.
On Tuesday, France’s privacy regulator took issue with an entirely different part of Facebook — messaging service WhatsApp. France threatened to fine Facebook for taking user data from WhatsApp without user consent.
The two sanctions follow a steady drumbeat from the European Union and individual countries in Europe promising to regulate data-rich tech companies — something almost entirely missing from the U.S.
Facebook declined to make any representatives available for comment.
Europe has for years been more aggressive in regulating tech companies, Facebook and Google in particular. The biggest move came in April 2016 when the EU adopted the General Data Protection Regulation (GDPR), though it won’t go into action until May 2018.
The GDPR represents that most aggressive action yet by a government to try to rein in the immense power of Google and Facebook. It sets rules on how personal data can be collected, stored, and used. It also puts into place certain rights that will make sure people can control their data and know exactly what data is being collected.
And the new rules give the EU the ability to slap companies with massive fines if they don’t comply.
This isn’t great for Facebook, which has grown into a global megapower by offering its services for free so that it can collect user data, which is then used for hyper-targeted advertising. The social network tracks users just about anywhere on the internet thanks to its near-ubiquitous Like button. That data dominance has helped Facebook make billions upon billions of dollars.
Europe’s willingness to go after what is essentially Facebook’s business model isn’t something the social network is taking lightly, according to Jason Kint, CEO of digital trade association Digital Content Next.
“I think Facebook is absolutely taking it very seriously, and so is Google,” Kint said. “Their interests and anybody that is in the third-party data collection business is paying a lot of attention to Europe.”
They’re less concerned about the U.S., where regulation has been headed in a different direction. Kint noted that U.S. antitrust regulators — the people who make sure companies are operating fairly — are focused on consumer pricing rather than competition.
That means while Germany sees Facebook’s data dominance as being anti-competitive, the notion that Facebook is still free means the social network mostly gets a pass — though that could change.
“The discussion is starting in the U.S. too, we’re just not as far along in the analysis ,and the competition law here in the U.S. hasn’t bene updated and doesn’t treat it the same way as Europe,” Kint said.
Don’t expect stateside changes anytime soon, if at all. There’s still a strong contingent of academics, analysts, and politicians in the U.S. that don’t see antitrust as the right way to regulate Facebook.
In an interview with Wired, New America fellow and former White House tech policy advisor under Barack Obama Dipayan Ghosh said antitrust would not be effective in regulating the data operations of tech companies.
“[Antitrust] doesn’t seem to be the right manner of regulation, given the intricacies involved in delivering innovations over the internet,” he says. “In fact, it almost seems arbitrary.”
Even if the U.S. doesn’t change its ways, Europe could be a big enough problem for Facebook and other tech giants that they’ll have to make broad changes to how the collect, handle, and use personal data.
Depending on what that means for consumers, Americans might have a lot of thank EU letters to write.