Facebook, Inc. (FB) - Get Facebook, Inc. Class A Report is facing another challenge to its business practices, with Germany's anti-trust regulator moving to break up what it contends is the tech company's monopolization of social media data at the expense of competitors.
Germany's anti-trust office, the Federal Cartel Office, has told the tech giant to stop taking information it gathers on users when they visit other internet sites, such as Instagram and WhatsApp, and combining it with their Facebook account data, according to published reports. Both Instagram and WhatsApp are owned by Facebook.
German regulators contend Facebook users, under the system the tech company has been using, aren't given a real choice in the matter since they have to agree to the data collection and collating in order to use Facebook.
The social networking behemoth will now be required to ask its 23 million German users for permission before it combines data it gathers from other internet sites with the information in their Facebook accounts.
Shares of Facebook dropped 2.41%, to $166.38, while the broader Nasdaq was down 1.18%.
"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," Andreas Mundt, the president of Germany's anti-trust office, told CNN.
In a blog post this morning, Facebook hit back and said it will appeal the decision.
Arguing "popularity is not dominance," Facebook said it faces "fierce competition" in Germany from YouTube, Snapchat (SNAP) - Get Snap, Inc. Class A Report and Twitter (TWTR) - Get Twitter, Inc. Report and that 40% of social media users in the country aren't on Facebook.
"The Bundeskartellamt 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," wrote Yvonne Cunnane, Facebook's data protection chief, and Nikhil Shanbhag, director and associate general counsel.