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German Competition Ruling Undermines Europe’s Digital Economy

by Eline Chivot

BRUSSELS—In response to the German competition authority’s ruling that Facebook’s data practices have abused market dominance, and prohibiting the company from combining and using user data from different sources, the Center for Data Innovation issued the following statement from its senior policy analyst, Eline Chivot:

Today’s decision by Germany’s competition authority will undermine the ability for digital platforms to share data and for Europe’s digital economy to grow.

Companies like Facebook have invested heavily to comply with the GDPR and ensure they have obtained lawful consumer consent for data processing. Its methods for collecting and processing data are similar to most other digital platforms. But the German competition authorities have sent the message that following the letter of the law is not enough, and companies now face the challenge of complying with ever-evolving rules. Introducing uncertainty in the market is rarely good for consumers.

Further, this ruling would likely require Facebook and other similar platforms to make their services available to all users, including those who refuse to consent to data collection. Yet personal data is critical to making digital platforms useful, interesting, and secure. Moreover, without personal data, it will be harder for other businesses and start-ups to scale and leverage larger platforms to build innovative apps and services of their own, which will stunt the growth of Europe’s data-driven digital economy and disadvantage European consumers and businesses.

The digital economy has evolved significantly in the fifteen years since Facebook was founded—in large part thanks to more and better use of data. And over the years, companies have become more transparent and consumers have learned more about how digital platforms operate. It is now time for regulators to recognize personal data is necessary to innovation in the digital economy and act accordingly.

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