German Competition Watchdog Opens Probe Against Facebook

Facebook's privacy rules are under fresh scrutiny in Germany after the country's competition watchdog said Wednesday it suspects the social networking site of abusing its dominant market position to make users hand over too much personal information.

The California-based company has repeatedly faced challenges to its terms of service in Germany and last week was ordered to pay a fine for making excessive demands on the intellectual property of its users.

"There is a preliminary suspicion that Facebook's terms of use breach data protection rules," Germany's Federal Cartel Office said in a statement.

Facebook rejected claims of wrongdoing. "We are confident that we comply with the law and we look forward to working with the Federal Cartel Office to answer their questions," said Tina Kulow, the company's director of corporate communication for Northern, Central, Eastern Europe and Benelux.

The competition watchdog said its probe is directed against Facebook's subsidiaries in Ireland and Hamburg, Germany.

"Market dominating companies have a special responsibility," said Andreas Mundt, the head of the cartel office. Facebook's collection of users' personal data is important to the company's advertising business and therefore warrants particular scrutiny, he said.

"In order to access the social network users must first agree to the collection and use of this data by declaring their consent to the terms of use," the cartel office said. "The extent of the permissions granted is hard for users to comprehend."

"There are considerable doubts about the admissibility of this practice especially under the current national data protection law," it added.

Last month the company was fined 100,000 euros ($109,000) by a Berlin court for failing to narrow the rights that users have to grant Facebook to use their intellectual property, such as photos and videos.