Facebook has drawn the watchful eye of a German cartel office in regards to whether it has abused its dominant position in the social networking market.
The Germany cartel office, which is known as Bundeskartellamt or Federal Cartel Office, announced Wednesday that it was conducting an antitrust investigation in regards to whether Facebook users were properly informed about how their data could be used.
In a statement, the Federal Cartel Office said there was initial suspicion that Facebook's conditions of use were in violation of Germany's strict data protection laws. The German cartel office said it was difficult for Facebook users to understand the terms of service agreement, which includes the company's collection and use of their data.
"Dominant companies are subject to special obligations," said Federal Cartel Office President Andreas Mundt in a statement. "These include the use of adequate terms of service as far as these are relevant to the market. For advertising-financed Internet services such as Facebook, user data are hugely important. For this reason it is essential to also examine under the aspect of abuse of market power whether the consumers are sufficiently informed about the type and extent of data collected."
The cartel office said it was taking the lead in the antitrust case against Facebook, but it would be advising the European Commission and the competition authorities of the other EU member states of its progress.
According to a story in The New York Times, Facebook has about 500 million users in Europe. Google (Nasdaq: GOOG) and Microsoft Corp. (Nasdaq: MSFT) have also been the subject of antitrust investigations across the region.
Reuters reported that Facebook co-founder and Chief Executive Mark Zuckerberg visited Berlin last week, possibly in hopes of placating politicians and regulators in Germany.
"We are confident that we comply with the law and we look forward to working with the Federal Cartel Office to answer their questions," a Facebook spokeswoman wrote in an email to Telco Transformation Wednesday morning.
— Mike Robuck, editor, Telco Transformation