Italian Competition Authority ‘AGCM’ Fined Facebook €7 Million

• Facebook has gotten a €7 million fine from the Italian competition authority ‘AGCM.’
• The social media firm has failed to distinguish between data collected for targeted advertising and personalization.
• The fine is unlikely to change the situation, but it could generate a wave of similar investigations in Europe.

Italy’s Competition Authority ‘AGCM’ (Autorita' Garante della Concorrenza e del Mercato) has announced a fine of €7 million (approximately $8.45 million) against Facebook Ireland Ltd and its parent company Facebook Inc. The reason for the sanction is a failure to implement the provisions that the authority requested back in November 2018, relating to clarifications on how user data that is collected by the social media company is actually used.

According to AGCM, Facebook failed to adequately inform users about what data it collected and for which commercial purposes, specifically when the former signed up on the service. Also, there’s still no distinction between the purposes of service personalization and targeted advertising, two elements that Facebook loves to mix and blend to justify the collection of any data and present it as something acceptable.

The platform continued its practice of providing new users with vague details about what data it collects, hiding the commercialization aspect, and not clarifying a context for what data would be absolutely necessary to provide personalized services. The Italians not only asked Facebook to change these practices back in 2018, but they also demanded the platform to publish an amendment statement on the local homepage and the app to notify all Italian users.

No declarations were ever made by Facebook, and the €7 million fine is really unlikely to bring any change to that. The AGCM considered the amount based on the estimated economic value of collecting Italian user data during the last two years. From their perspective, that’s all they could impose while remaining in a sane context of proportion. Otherwise, Facebook would be given a legally sound opportunity to challenge the fine, although they may still do it.

What may happen thanks to this fine is to see more consumer data protection authorities in Europe following the example of the Italians and launching similar investigations and imposing additional fines to Facebook. Maybe this will force the social media giant to separate the data it collects for service personalization and for actually making money, at least for Europe.

As we discussed recently, we don’t expect Facebook to change its business model, as collecting user data and selling it to advertisers is precisely what made it so financially powerful in the first place. However, we do expect the firm to get increasingly exposed and eventually isolated for these practices as the data pumping channels continue to tighten.