Facebook is without a doubt one of the most successful tech firms across the globe. Part of its achievements is building a massive advertising business on what it exactly knows about its billions of users. According to CNN, this idea could be a make or break for the company.
Many believe that the social media giant’s enormous database could soon become its largest problem. In fact, the clearest warning has already arrived recently. It was when Germany’s very own anti-trust office ruled that the tech company was guilty of abusing its market position. This move, according to the said office, was made possible by combining its data with information from WhatsApp, Instagram, and other third-party sites.
The regulator reportedly asked Facebook to stop the aforementioned practice. The order is based on a ruling that experts believe could possibly shape the tech company’s very own future. What is worse is that it could even help in paving its way to breaking up.
According to Anu Bradford, who is a professor at Columbia Law School, the regulators are finding ways to internally break-up the world’s famous social media site. While there are many ways to do this, the anti-trust office opted to do so by limiting the company’s way of performing its business and how different services tend to interact.
Bradford, however, clarified that it is not entirely a breakup. It is rather about ramping up the pressure for Facebook.
One thing is for sure here, though. Data issue was handled by an anti-trust regulator, which should have been a privacy watchdog. And with this, there is potentially a significant shift in the way authorities view social media as a whole.
A competition specialist and professor at the University College London named Ioannis Lianos said that in the traditional sense of things, the anti-trust law is more focused on whether businesses use their sizes in hopes of excluding competition and, at the same time, increase prices.
For Lianos, there is an apparent case of this in the digital economy. In other words, in this type of economy, risks and/or harms to consumers may not necessarily be taken in the form of higher prices or even lack of innovation. It could also mean lower privacy.
First and foremost, Facebook is not charging people for using the social media platform. Instead, users are asked to pay by simply handing over their data. This, in turn, transforms into money for the company, which is done by selling ads targeted at specific users.
The Germany-based regulators further stated that the social media company controls more than 95 percent of the country’s overall social media market. This only means that users have to decide between the tech company’s data collection and not using the platform.
The regulators also said that companies such as Google (Twitter and YouTube) and Snapchat (SNAP) do not offer the same type of services like Facebook. As a result, it is almost impossible to include the social media giant in the market.
Lianos, however, said that this could be a competition issue. The regular has ordered the tech firm to see users’ explicit consent in order to collect and even combine data. The company, on the other hand, argued that it completely disagreed with the decision. As such, it plans to directly appeal against it.
The tech firm also claimed that the Germany-based regulator was simply trying to implement what appears to be an unconventional standard. And it is even meant for a single company. The company, however, declined to give further details. Unfortunately for the company, there have been calls for limiting its power.