Tag Archives: German

German Regulators Just Outlawed Facebook's Whole Ad Business
February 8, 2019 12:50 am|Comments (0)

Facebook’s massively lucrative advertising model relies on tracking its one billion users—as well as the billions on WhatsApp and Instagram—across the web and smartphone apps, collecting data on which sites and apps they visit, where they shop, what they like, and combining all that information into comprehensive user profiles. Facebook has maintained that collecting all this data allows the company to serve ads that are more relevant to users’ interests. Privacy advocates have argued that the company isn’t transparent enough about what data it has and what it does with it. As a result, most people don’t understand the massive trade-off they are making with their information when they sign up for the “free” site.

On Thursday, Germany’s Federal Cartel Office, the country’s antitrust regulator, ruled that Facebook was exploiting consumers by requiring them to agree to this kind of data collection in order to have an account, and has prohibited the practice going forward.

“Facebook will no longer be allowed to force its users to agree to the practically unrestricted collection and assigning of non-Facebook data to their Facebook user accounts,” FCO president Andreas Mundt said in a statement announcing the decision.

“We disagree with their conclusions and intend to appeal so that people in Germany continue to benefit fully from all our services,” Facebook wrote in a blog post responding to the ruling. The company has one month to appeal. If it fails, Facebook would have to change how it processes data internally for German users, and could only combine the data into a single profile for a Facebook account with that user’s explicit consent.

“This is significant,” says Lina Khan, an antitrust expert affiliated with Columbia Law School and the think tank Open Markets. She notes that authorities haven’t done a good job of articulating why privacy is an antitrust issue. Here, the German regulator makes it clear. “The FCO’s theory is that Facebook’s dominance is what allows it to impose on users contractual terms that require them to allow Facebook to track them all over,” Khan says. “When there is a lack of competition, users accepting terms of service are often not truly consenting. The consent is a fiction.”

According to the FCO, Facebook had 32 million monthly active users in Germany at the end of last year, amounting to a market share of more than 80 percent. The regulator argues this dominance gives it jurisdiction to oversee the company’s data collection practices.

“As a dominant company Facebook is subject to special obligations under competition law. In the operation of its business model the company must take into account that Facebook users practically cannot switch to other social networks,” said Mundt. “The only choice the user has is either to accept the comprehensive 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.”

The FCO further argues that Facebook used its vast data collection to build up its market dominance, creating a feedback loop wherein people have no choice but to use the site and allow it to track them, which makes the site even more dominant and entrenches its privacy violations.

“The Bundeskartellamt [FCO] underestimates the fierce competition we face in Germany, misinterprets our compliance with GDPR and undermines the mechanisms European law provides for ensuring consistent data protection standards across the EU,” Facebook wrote in response to the ruling. They cite Snapchat, Twitter, and YouTube as direct competitors, hoping to illustrate that there isn’t lack of competition, and therefore the FCO has no standing to apply rules based on Facebook’s dominance. “Popularity,” they write, “is not dominance.”

The FCO disagreed, explaining that Snapchat, YouTube, and Twitter serve totally different functions from Facebook, and therefore can’t be seen as viable alternatives to the service.

Antitrust regulators used to consider data and privacy outside their purview. The old philosophy held that antitrust was concerned with price, and if a product was free then consumers couldn’t be harmed, says Maurice Stucke, antitrust expert and law professor at the University of Tennessee. “What we’re seeing now is those myths are being largely discredited.”

The most remarkable part of the ruling is the way it makes clear that privacy and competition are inextricably intertwined. “On the one hand there is a service provided to users free of charge. On the other hand, the attractiveness and value of the advertising spaces increase with the amount and detail of user data,” Mundt said. “It is therefore precisely in the area of data collection and data use where Facebook, as a dominant company, must comply with the rules and laws applicable in Germany and Europe.”

“This is the first instance where [regulators] are saying that because [a company has] such market power that consent is not freely given,” says Stucke.

The FCO ruling explains that the harm to users from Facebook’s data collection is not in cost but in “loss of control.” “They are no longer able to control how their personal data are used. They cannot perceive which data from which sources are combined for which purposes with data from Facebook accounts and used e.g. for creating user profiles,” the FAQ on the ruling reads. That combining of data gives it a “significance the user cannot foresee.”

That fact is underscored by people’s ignorance of Facebook data practices. Roughly 74 percent of American Facebook users surveyed recently by the Pew Charitable Trusts did not know that Facebook maintained profiles about their interests. Fifty-one percent of those surveyed said they weren’t comfortable with the practice.

But Facebook says that tracking people makes the services safer and better, and that the FCO misses how much the company has done in order to comply with the General Data Protection regulation passed by the European Union in 2018.

The FCO’s ruling, however, directly addresses the GDPR, writing that under its principles Facebook has “no effective justification for collecting data from other company-owned services and Facebook Business Tools or for assigning these data to the Facebook user accounts.” (Facebook Business Tools are the Like and Share buttons that appear all over the internet, and which allow Facebook to track you on sites they don’t own.) In other words, in addition to being anticompetitive in its view, the FCO believes Facebook hasn’t proven that data collection and bundling is in the best interest of every consumer and that its sites couldn’t function without it.

If Facebook loses the appeal, then Germany will become a grand experiment in whether the surveillance economy is actually essential to the operation of social media. Other Europeans and Americans may demand they are given the same option. “This ruling is really an icebreaker. Icebreakers break through the ice in order to lead the path for other vessels to follow,” says Stucke.


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German ministers discuss Huawei's role in 5G network: sources
February 6, 2019 12:47 pm|Comments (0)

BERLIN (Reuters) – German ministers were due to meet on Wednesday to discuss how to safeguard security in future 5G mobile networks, two government sources said, amid intense debate over whether to shut China’s Huawei Technologies out of the market.

FILE PHOTO: A man walks by a Huawei logo at a shopping mall in Shanghai, China, Dec. 6, 2018. REUTERS/Aly Song/File Photo

Chancellor Angela Merkel has said Germany needs guarantees that Huawei would not hand data to the Chinese state before it can take part in building fifth-generation networks that would link everything from vehicles to factories at far greater speeds.

Dieter Kempf, head of the Federation of German Industry (BDI), threw his weight behind Merkel, saying that ensuring firms like Huawei meet tough security standards would be wiser than a blanket ban on China.

“It makes no sense,” Kempf told Reuters in an interview. “It would narrow the choice of vendors. That could affect costs. More importantly, there would be political consequences – China could be tempted to retaliate against German companies.”

The Handelsblatt daily cited government sources as saying the meeting would focus on whether a security catalog, drafted by the federal network regulator (BNetzA) and cybersecurity watchdog (BSI), along with certification rules and a no-spy pact with China, would be enough to make 5G safe.

Huawei, the global networks market leader with annual sales exceeding $ 100 billion, faces international scrutiny over its ties with the Chinese government and suspicion Beijing could use its technology for spying, which the company denies.

A State Department official said on Tuesday that Washington sees the European Union as its top priority in a global effort to convince allies not to buy Huawei equipment for next-generation mobile networks over espionage concerns.

TIGHTER COMPLIANCE

The German ministers’ session, scheduled after the weekly cabinet meeting, and attended by the interior, economy, finance, and transport ministers, follows a first high-level meeting last week.

At that gathering, attended by Germany’s three network operators, market leader Deutsche Telekom proposed a series of technical and compliance measures to safeguard security.

These included setting up an independent laboratory, under BSI oversight, to scrutinize all equipment used in critical infrastructure before it is deployed in the field.

“I believe the right path would be to make sure we manage our risks when it comes to tenders,” Kempf said.

“We must convey our reservations to the Chinese side and make it clear what we will not tolerate in our legal system.”

Government and industry sources said no decision was expected on Wednesday about whether to bar Huawei from Germany’s 5G auction, which is due to be held in the second half of March.

Sources say the different stakeholders have yet to reach a consensus on what course of action to take. Nor do they agree on whether a decision is needed before the 5G auction, which would provide clarity to operators before they strike deals to upgrade their networks to ready them for the launch of 5G services.

Additional reporting by Riham Alkousaa, Nadine Schimroszik and Michael Nienaber; Writing by Michelle Martin and Douglas Busvine; Editing by Mark Potter and Kirsten Donovan

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German lawmakers to grill Facebook manager on data privacy
April 19, 2018 6:03 pm|Comments (0)

BERLIN (Reuters) – German lawmakers will question a senior Facebook Inc manager about data privacy in the wake of revelations that the personal information of millions of users wrongly ended up in the hands of political consultancy Cambridge Analytica.

FILE PHOTO: A 3D-printed Facebook logo is seen in front of displayed stock graph in this illustration photo, March 20, 2018. REUTERS/Dado Ruvic/File Photo

Lawmakers in the Bundestag lower house of parliament will grill Joel Kaplan, Facebook’s vice president for global public policy, during a closed-door session on Friday morning.

The meeting mirrors the appearance of Facebook’s Chief Executive Mark Zuckerberg before a U.S. Congressional joint hearing on April 10-11 over the scandal engulfing the world’s largest social network.

The 87 million Facebook users affected included nearly three million Europeans and Zuckerberg is also under pressure from EU lawmakers to come to Europe to shed light on the data breach.

“Facebook needs to show more openness and transparency when dealing with user data,” said Nadine Schoen, deputy leader of Chancellor Angela Merkel’s conservative bloc in the Bundestag.

She said Facebook needed to do more than just pay lip service and it remained to be seen how serious the company was about really improving user rights.

“It is not enough to exchange the gray T-shirt and jeans for suit and tie,” she said in reference to Zuckerberg’s appearance in the U.S. Congress.

The senior lawmaker said that Facebook so far was giving the impression that it only wanted to save its business model.

“For example, the company is already rowing back in the supposedly world-wide announced implementation of the General Data Protection Regulation,” Schoen warned, referring to privacy rules that will enter force in the European Union next month.

“We no longer need excuses, but facts,” she said.

German Justice Minister Katarina Barley last month summoned executives of the firm, including European public affairs chief Richard Allan.

Misuse of data by Facebook means it will in future be bound by stricter regulations and the threat of tougher penalties for further privacy violations, Barley said after the meeting.

Reporting by Michael Nienaber; Editing by Douglas Busvine

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Netflix’s New Series Dark Looks Like the Scarier German Version of Stranger Things
March 4, 2017 12:40 am|Comments (0)

“A missing child sets four families on a frantic hunt for answers. Their search for a culprit unearths a small town’s sins and secrets.” No, it’s not the description of Stranger Things. It’s actually the plot of a new Netflix original series called Dark and while the two sound very similar, but that’s where the…

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