Popularity Does Not Equal Dominance

By Yvonne Cunnane, Head of Data Protection, Facebook Ireland 

We recently received preliminary views from Germany’s Bundeskartellamt about a competition inquiry it opened in 2016. We recognize the importance of this inquiry and we’ll continue to cooperate with the agency. Although we’re still reviewing the preliminary report, we look forward to answering officials’ questions and demonstrating how Facebook contributes to a competitive marketplace in Germany and around the world.

Bundeskartellamt’s preliminary report paints an inaccurate picture of Facebook. Although Facebook is popular in Germany, we are not dominant. We’re just one part of how people interact, and we must constantly innovate to ensure we’re meeting people’s expectations – from designing new features to improving reliability to giving people better controls over their experience on Facebook. If we fail, people will go elsewhere – as history has shown with other technology services over the years.

The reality is that Facebook doesn’t show any of the signs of a dominant company in Germany or elsewhere.

A dominant company operates in a world where customers don’t have alternatives. Taking a look at the average smartphone home screen shows that the reality is much different. People in Germany and elsewhere have many choices for sharing, discovery, and communications, and Facebook is just one of those options. When people choose to use Facebook, they often do it side-by-side with other free apps. The average person now uses seven different social communication apps or services – twice as many as they did just five years ago. When someone wants to share a photo or video, there’s not only Facebook, but Snapchat, YouTube, Flickr, Twitter, Google Photos, Pinterest, and others. Half of German internet users don’t just use Facebook alongside other apps, they don’t use Facebook at all. We acknowledge Facebook is popular, but that popularity is hard won. When people don’t like our products, they tell us by not adopting them. For example, we’ve had to shut down apps and other features that didn’t succeed, including Slingshot, Paper, and Rooms. People win because they have access to the best services.

A dominant company can save the expense of innovating because it doesn’t have to fear someone else developing better features. We don’t have that luxury. We must constantly innovate to attract people, from designing new features to improving reliability to giving people better controls over their experience on Facebook. If we fail, people will go elsewhere – as history has shown with other technology services over the years. We spent more than a fifth of our global revenue last year ($6 billion) on research and development to keep up with the likely seismic technological shifts that are around the corner in the form of virtual reality, digital assistants and the internet of things. We’ve repeatedly had to change to keep up with what people want – re-engineering Facebook for mobile devices, investing heavily in video, and building out new messaging features. Our size does not allow us to create products and force people to use them. That’s how a company acts in a competitive marketplace — it’s not how a dominant company behaves.

A dominant company can safely ignore unsatisfied customers. But we constantly have to account for what people want and adapt our features. For example, we regularly update our policies about what people can post on Facebook in response to what we hear from people in Germany and around the world. We have also heard from people that the reasons people saw ads on Facebook were too opaque. Now you can tap on any ad on Facebook to see why you’re seeing that ad, and access your ad preferences. People drive us to do better and we keep improving.

But what about data protection?

Bundeskartellamt has also raised questions about how Facebook collects and uses data. We agree with Bundeskartellamt that data protection is an important topic, and lawmakers in Germany and across Europe do as well. It’s why they built on existing laws and created the General Data Protection Regulation (GDPR), putting in place strong enforcement measures that hold Facebook and other companies accountable. These rules apply to everyone across Europe because people deserve to have their data protected, regardless of the size of the company they’re dealing with. Having different requirements for large and small companies undermines what policymakers intended when they created the GDPR.

We will of course comply with the GDPR when it comes into effect in May 2018, just as we’ve complied with other European data protection laws for many years. Nothing in Bundeskartellamt’s report changes this. We’ll be introducing additional controls and providing even more education about how we protect people’s data and security in the coming months. We’ll be working directly with relevant data protection officials to ensure our approach meets the requirements set out by GDPR and are confident that we’ll be able to address the questions posed by Bundeskartellamt.

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