Facebook business model banned by German government

Published 13 Feb, 2019

As published by WIRED, on Feb 7th, Germany's Federal Cartel Office, FCO, prohibited Facebook's business model to collect unrestricted data unless granted explicit user consent. 

Andreas Mundt, President of the Bundeskartellamt: “With regard to Facebook’s future data processing policy, we are carrying out what can be seen as an internal divestiture of Facebook’s data. In future, 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. The combination of data sources substantially contributed to the fact that Facebook was able to build a unique database for each individual user and thus to gain market power. In future, consumers can prevent Facebook from unrestrictedly collecting and using their data. The previous practice of combining all data in a Facebook user account, practically without any restriction, will now be subject to the voluntary consent given by the users. Voluntary consent means that the use of Facebook’s services must not be subject to the users’ consent to their data being collected and combined in this way. If users do not consent, Facebook may not exclude them from its services and must refrain from collecting and merging data from different sources.”

Facebook replied in its blog post that it intends to appeal, and that Germany's FCO overlooks the benefits of collecting data across services for improvement of user experience. Facebook has 32m monthly active users, and market share of 80% in Germany. 

The irony here is that not so long ago, between Feb 8th, 1950 through Nov 9th, 1989, offical date of falling of Berlin Wall, the East German secret police, the Stati, was one of the most notorious surveillance operations in history. It employed 100k employees, in addition to 500k-2m collaborators, spying on friends, neighbors and family by any means necessary, and maintained files on 6mm citizens, a third of population, with a budget of $1B/year. 

The point here is that when German gov't, with its own history of espionage, is essentially admiring the information collection operation Facebook built to the point banishment ('takes one to know one'), its clear that this model does not work. the UK gov't also banished Facebook in 180 page report, and we also see this in other instances

OptiMargin is philosophically opposed to viewing data as an asset to hoard, rather we view it as a LIABILITY to avoid. It is with that frame of reference that we approach the business from a long-term view.