Facebook has been ordered to cease all of its data collection practices in Germany, after a recent German court ruling.
The Cartel Office objected to the world’s largest social media network, claiming that it abused its market power to gather information without user consent. Online privacy is a grave concern in Germany as they lead the global charge against Facebook. This follows the Cambridge Analytica scandal of last year, where millions of user profiles were harvested for consumer information, without consent.
In particular, the German court was scathing of Facebook’s pooling of people’s data on third-party applications, like WhatsApp and Instagram, coupled with its online-tracking mechanisms of non-members through ‘likes’ and ‘shares.’
Facebook to appeal
The ruling is yet to have any legal force and Facebook have subsequently confirmed that they will lodge a formal appeal. The global conglomerate has a month to lodge their appeal.
In a blog post, Facebook claimed that they disagreed with the German court’s rulings, upholding that they would appeal so all German citizens could enjoy the full Facebook service. Currently, Facebook has approximately 23 million active users in Germany.
The global company has also rebuffed the assertion that they hold market dominance in Germany. Indeed, Facebook criticised the Cartel Office for failing to recognise YouTube and Twitter as key competitors. Having said this, Facebook’s German user base equates to approximately 95% of market share.
Consequences for Facebook’s model
If the German ruling stands, Facebook’s business model, which is largely predicated on advertising, will need to be seriously amended. A failure to comply on Facebook’s behalf could see fines of up to 10 per cent of global revenue. Last year, Facebook’s global revenues were $78.5 billion.
In essence, if Facebook’s appeal is to fail, it will have far-reaching consequences for the social network’s business model. It would have to significantly reduce data collection and develop a system that revolves around voluntary consent.