One arm of the European Union is looking into whether Facebook and other tech companies unfairly favor their own services over those of rivals. At least five data protection watchdogs across the region are questioning Facebook’s privacy settings.
And in a case that could have implications for many tech companies, the region’s top court will issue a preliminary decision next month on whether Facebook can continue transferring user data between Europe and the United States.
Move over, Google. Facebook is the latest American tech giant that Europeans love to hate.
For decades, European policymakers have taken aim at America’s giant tech businesses, trying to force them to play by European rules. In the past, Microsoft and Intel were found guilty of abusing their dominant positions to shut out rivals. Google has most recently been under the microscope, and it faces accusations that it unfairly promoted some of its search products over those of competitors.
In recent months, though, regulators’ gazes have turned to Facebook, raising questions about whether the social network has learned from the mistakes of companies such as Intel, Microsoft and Google when dealing with Europe’s policymakers and its legal system. And as Facebook runs into more regulatory hurdles in Europe, the scrutiny could distract the company from its ambitions of becoming a one-stop shop for Internet messaging, online publishing and digital advertising.
“Platforms like Facebook have grown quickly to become global forces,” said Serafino Abate, a director at the Center on Regulation in Europe, a research organization in Brussels. “But with that size comes responsibility.”
The scrutiny is mounting as the company’s messaging and digital advertising services spread globally. More than 1.4 billion people now use Facebook, and hundreds of millions of people also rely on the company’s mobile messaging services, WhatsApp and Facebook Messenger, and its photo sharing service, Instagram.
Facebook’s core business, its social networking service, is especially popular in Europe. The company has almost doubled its number of European users to the service to around 260 million since 2010. Facebook also has more users in Europe than in the United States, according to eMarketer, a research company.
If found to have breached the privacy rules, Facebook may face fines or demands that it change how the company handles people’s data, though the company says it complies with the region’s data protection laws.
“Obviously, there are privacy issues,” said Mathias Moulin, deputy director of enforcement at the French data protection regulator, who is overseeing the watchdog’s review of the company’s activities and who will meet other regulators at month’s end to discuss the investigations. “This is a global company. Facebook affects millions of people across Europe.”
Taking a page from the playbooks of other U.S. tech companies, Facebook has not stood idle as regulators steadily lined up against it.
The company has hired prominent former lawmakers and regulators, including Erika Mann, a former German member of the European Parliament. This month, the company also chose Kevin Martin, a former chairman of the Federal Communications Commission, to champion its cause in Washington, Brussels and beyond.