Facebook under fire; German antitrust watchdog plans action this year

Germany’s antitrust watchdog expects to take first steps this year in its probe against Facebook after finding that the social media giant abused its market dominance to gather data on people without their knowledge or consent.

The probe is being closely watched in Europe amid mounting concerns over leaks of data on tens of millions of Facebook users, as well as the extensive use of targeted ads by foreign powers seeking to influence elections in the United States.

The Federal Cartel Office objects in particular to how Facebook acquires data on people from third-party apps - including its own WhatsApp and Instagram services - and its online tracking of people who aren’t even members.

“We are conscious that this should, and must, go quickly,” cartel office President Andreas Mundt told a news conference on Monday, adding that he hoped to take “first steps” this year. He declined to elaborate.

The German probe is not expected to end in fines for Facebook, in contrast to European Union probes into Google that have ended in multi-billion-dollar penalties, most recently over the preinstallation of its apps on Android smartphones.

Sources familiar with the matter say, however, that the cartel office could require Facebook to take action to address its concerns if the company fails to do so voluntarily.

Facebook responded earlier this year to the cartel office’s request for information, and the authority was reviewing whether new features - such as a “clear history” option announced by CEO Mark Zuckerberg in May - would address its concerns.

“We need to establish whether this affects our investigation and addresses our concerns,” Mundt said.

Separately, Mundt confirmed comments he made in a newspaper interview earlier this month that he may launch an investigation into the e-commerce industry under new powers that enable the cartel office to launch sector-wide probes.

The focus would be on so-called “hybrid” platforms such as U.S. e-commerce giant Amazon (AMZN.O) that sell their own products and services, but that also host third-party traders.

“Our question is: what is the relationship between the platform, which itself is a very powerful trader, and the traders who use the platform?” said Mundt. He added that Amazon was the best-known of the e-commerce platforms but his interest in the matter extended to other players.

The cartel office would not be looking at suspected tax evasion by third-party traders on e-commerce platforms - an issue that Chancellor Angela Merkel’s government has vowed to tackle - saying this was a matter for economic policy makers.