Germany Opens Investigation Into Facebook

Mark Zuckerberg

Germany's antitrust authorities suspect the social media giant's terms of service may constitute a misuse of its near-monopoly position.

German authorities have opened an investigation into Facebook on the suspicion that Mark Zuckerberg's social media company may have abused its dominant position in the German market.

The investigation, revealed Wednesday by the German federal antitrust office, the Bundeskartellamt, will look into allegations Facebook may have used its dominance to saddle users with conditions that don't sufficiently protect their personal data.

Facebook is the single most dominant social media network in Germany with around 28 million users and 80 percent of the market. The investigation will look at operations at Facebook's parent company in the U.S. as well as its subsidiaries in Germany and Ireland (where Facebook has its European headquarters).

Facebook has been the target of numerous legal challenges in Germany, but the investigation takes these to a new level. The antitrust office has wide-ranging powers to fine companies or compel changes in their behavior if they are found to have violated German law. The German authorities will cooperate with the European Commission's antitrust office in its investigation.

The Bundeskartellamt did not give a timetable for the investigation, but far-reaching cases involving large companies such as Facebook can take years to work themselves through the German system. At issue is whether Facebook's extensive terms of service, the conditions users have to sign off on before being allowed to join, are sufficiently clear and comprehensive, explaining exactly how Facebook uses the personal data it gathers and stores from its users.

Earlier this week, a Berlin court fined Facebook €100,000 ($108,000) for failing to comply quickly enough with a court order to change its terms of service. The case involved Facebook taking all rights, worldwide, to content posted on its site by German users. In 2011, amid similar concerns in the U.S., Facebook reached a 20-year privacy settlement with the U.S. government, requiring the social network to ask users for permission before changing the way their personal information is released. Facebook also has to go through independent privacy audits every two years.

A spokeswoman for Facebook in Germany said the company was confident it was operating within the law and would cooperate fully with German authorities in their investigation. In regards to the Berlin ruling, Facebook has acknowledged fault and said it will pay the fine.

It isn't the first time Facebook has come under fire in Germany. German privacy and data protection laws are stricter than those in the U.S. and large media groups that use private data for commercial purposes, including Facebook and Google, are viewed with suspicion by many here. Facebook has also been criticized for not doing enough to fight the spread of hate speech on its German site. German law outlaws certain forms of hate speech, including Holocaust denial, but extreme sentiments are often posted on social media sites like Facebook.

Critics say the company has not done enough to prevent such material from being posted and, when spotted, to take it down quickly. Two German lawyers recently filed suit against Zuckerberg himself, accusing him of aiding and abetting hate speech and calling for a $163 million fine. Last week, Zuckerberg went on the PR offensive, visiting Berlin to meet with German politicians and staging a town hall question-and-answer session with local residents.