Facebook won’t face a fine in German antitrust probe of privacy terms

20 March 2017 1:15pm

3 February 2017. By Matthew Newman.

Facebook won't face a fine following a German probe into whether the social network's terms and conditions abuse its market power, the head of the country's antitrust authority said today.

"It's important to say that there's no risk of a fine," Andreas Mundt told a conference* in London. "It's about shaping privacy issues in the area of platforms and networks."

The Bundeskartellamt suspects that the giant social network's terms of service break data-protection rules and could amount to an abuse of market power because users have no choice but to consent to them.

The probe began in March last year, but still hasn't determined whether Facebook is dominant in social media, Mundt stressed.

Mundt called it important for antitrust authorities to deal with these cases, even though some policymakers say online platforms should be regulated through legislation. Lawmaking isn't an efficient option, he said, because regulation can become quickly outdated.

"Competition law can do a good job, because it's so lively," he said. "If you regulate, you have to re-invent regulation. Competition law is faster. That's not to say that it cures everything, but privacy is a good issue."

Mundt said that the Facebook case is a "genuine" competition issue because it deals with consumer choice and the how data is treated as a good. "This is important to me," he said. "This is nothing experimental. This is nothing where we test the borders or limits of competition law."

The case is under the Bundeskartellamt rather than the country's privacy agency because the antitrust authority is seen as having a "broader impact" on privacy issues, he said.

The regulator said some companies may be changing their privacy policies to avoid facing a competition investigation.

* "Innovation Economics for Antitrust Lawyers," Concurrences Review and King's College, London, Feb. 3, 2017.

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