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German regulators excluded only Facebook's entire advertising industry

Facebook's massively lucrative advertising model relies on tracking its one billion users – as well as billions on WhatsApp and Instagram – over the Internet and smartphone applications, and collects data on which sites and apps they visit, where they shop, what like, and combine all that information into comprehensive user profiles. Facebook has maintained that gathering all these data allows the company to display ads that are more relevant to the users' interests. Privacy managers have argued that the company is not transparent enough about what data it has and what it does with it. As a result, most people do not understand the massive distance they make with their information when registering for the "free" site.

On Thursday, Germany's federal cartel office confirmed the country's antitrust regulator Facebook exploited consumers by demanding that they agree on this type of data collection to get an account and have banned the practice in the future.

"Facebook will no longer force users to accept the virtually unlimited collection and allocation of non-Facebook data to their Facebook user accounts," said FCO President Andreas Mundt in a statement of the decision.

"We are disagree with their conclusions and intend to appeal so that people in Germany will continue to take full advantage of all our services, "wrote Facebook in a blog post that responded to the decision. The company has a month to appeal. change how it processes data internally for German users, and can only combine the data into a single profile for a Facebook account with the user's explicit consent.

"When there is a lack of competition, Users who accept terms of use are often not totally agree. Consent is a fiction. "

Lina Khan, Open Markets

" This is important, "says Lina Khan, an antitrust expert affiliated with Columbia Law School and the Open Markets think tank. She notes that the government has not done a good job of articulating why privacy "The FCO's theory is that Facebook's dominance is what allows it to impose contractual terms on users that require them to allow Facebook to track them all over," says Khan. competition, the users who often accept the terms are not entirely in agreement. Consent is a fiction. "

According to FCO, Facebook had 32 million monthly active users in Germany at the end of last year, with a market share of over 80 percent. Regulator argues this dominance gives it the jurisdiction to monitor the company's data collection practices.

" As a dominant company Facebook is subject to special obligations under competition law. In the operation of the business model, the company must take into account that Facebook users practically cannot switch to other social networks, says Mundt. "The only choice the user has is either to accept the extensive combination of data or to refrain from using the social network. In such a difficult situation, the user's choice cannot be referred to as voluntary consent."

FCO further claims that Facebook used its vast data collection to build its market dominance, creating a feedback path where people have no choice but to use the site and let it track them, making the site even more dominant and anchoring their privacy violations.

"The Bundeskartellamt [FCO] underestimates the fierce competition we face in Germany, misunderstands our compliance with the GDPR and undermines the mechanisms European law ensures to ensure consistent data protection standards across the EU, wrote Facebook in response to the decision. They cite Snapchat, Twitter and YouTube as direct competitors, and hope to illustrate that there is no lack of competition, and therefore the FCO has no reason to apply rules based on Facebook's dominance. "Popularity," they write, "is not dominance."

FCO disagreed and explained that Snapchat, YouTube and Twitter earn completely different features from Facebook, and therefore cannot be seen as viable alternatives to the service. 1[ads1]9659003] Antitrust regulators used to evaluate data and privacy outside of their duties, the old philosophy claiming that antitrust was concerned price, and if a product was free, consumers could not be harmed, says Maurice Stucke, anti trustee expert and law professor at the University of Tennessee. "What we see now are the myths that are largely discredited."

The most notable part of the ruling is the way in which privacy and competition are inextricably intertwined. "On the one hand, there is a service that is provided free to users. On the other hand, the advertising's attractiveness and value increases with the amount and details of user data," says Mundt. "It is precisely in the field of data collection and data usage where Facebook, as a dominant company, must adhere to the rules and laws applicable in Germany and Europe. "

" This is the first time that [regulators] is saying that because [a company has] such market power that consent is not freely given, Stucke says.

The FCO government explains that the damage to users of Facebook's data collection is not in charge but in "loss of control." "They are no longer able to control how their personal data is being used. They cannot perceive what data from which sources are combined for which purpose of data from Facebook accounts and used, for example, to create user profiles, reads commonly questions about the decision. That the combination of data gives it a "meaningless user can predict."

This fact is underlined by people's ignorance of Facebook data practices. About 74 percent of US Facebook users recently investigated by Pew Charitable Trusts did not know that Facebook maintained profiles of their interests. One and a half percent of those surveyed said they were not comfortable with the exercise.

But Facebook says that tracking people makes services safer and better, and that FCO misses how much the company has done to comply with the General Data Protection Regulations adopted by the EU in 2018.

However, FCO's decision directly addresses GDPR, writing it under its prizes nsipper Facebook has "no effective reason to collect data from other business-owned services and Facebook Business Tools or to assign this data to Facebook user accounts. "(Facebook Business Tools are similar and shared buttons that appear all over the Internet, and which allow Facebook to track you on websites they do not own.) In other words, in addition to being competitive in their opinion, FCO believes that Facebook does not have proven that data collection and collection is in the interest of every consumer and that its sites could not work with it.

If Facebook loses its complaint, Germany will be a great experiment in whether the surveillance economy is actually important for the operation of social media. And Americans may demand that they get the same option. "This decision is really an icebreaker. Icebreakers break through the ice to lead the way for other vessels to follow, Stucke says.

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