The legality of the agreement is being examined
Usually when two companies merge, a check is made to see if the merger could lead to a monopoly and thus affect free competition. This will now happen with the two well-known social networking companies. In a first step, the competent supervisory authorities sent letters to other social networking companies to record their assessment.
For the EU, however, this particular case is unprecedented. It has never before examined the merger of the two social networking companies. The Commission is now called upon to examine whether this transaction has created a kind of "personal data monopoly." Those who are active and interested in the protection of personal data are mainly asking for an answer.
More personal data, better advertising
"In the past, one would ask whether someone had a monopoly and calculate whether the company was able to set prices well above cost. In this case, I don't see that as a problem, since the services offered are free," says Daniel Zimmer, head of the Department of Commercial Law and Economics at the University of Bonn, speaking to Deutsche Welle.
As Deutsche Welle, the free exchange of information via Facebook is one side of the company's business. The other side is that it rents its platform to display advertisements. And the cost goes up as the number of users goes up.
"A business may have a strong market position because it can evaluate user data. The more I know about my customers, the more services I can offer them and the more targeted advertising I can place and thus be attractive to the market. The availability of personal data can have a huge economic value for companies and mean that they can strengthen their market position," says the German lawyer again.
But what is the real power of the EU? Daniel Zimmer argues that the EU has managed in the past to prevent major mergers even of American companies.
