The investigation will examine whether Facebook's terms and conditions for collecting user data are unlawful and too confusing to understand, and if those factors play a role in the company's dominance as a social network.
The office said that Facebook collected a large amount of personal user data from various sources.
For advertising-financed Internet services such as Facebook, information about users is hugely important, Office President Andreas Mundt said.
Facebook makes money from targeted advertising to its 1.6 billion monthly users, using the data that it gathers from profiles, friends, postings, activities and opinions. Cartel officials said they would work "in close contact with the competent data protection officers, consumer protection associations as well as the European Commission and the competition authorities of the other EU member states". The Federal Commissioner for Data Protection, in charge of ensuring data-privacy rights in the country are respected, operate primarily at a state level, limiting resources. The anti-trust office has wide-ranging powers to fine companies or compel changes in their behavior if they are found to have violated German law.
He said Facebook may be labeled as a "dominant" player in the social network market, making the company obliged to obey stricter rules governing its behavior.
The regulator said it was investigating whether Facebook abused its market power by failing to adequately inform its users of the scope and nature of data collection on their Internet surfing habits.
The Bundeskartellamt will examine, "among other issues, to what extent a connection exists between the possibly dominant position of the company and the use of such clauses", it said.
"The court felt we did not update our terms quickly enough and has issued a fine, which we will pay", a Facebook spokesperson said. Dutch, Spanish, French, and Belgian data authorities have-alongside German regulators-been poking around Facebook's business practices, as part of a pan-EU probe to tackle the company's huge data-hoarding practices.
"However, it cannot be excluded that a behavior that violates data protection rules could also be relevant when investigating a possible violation of European Union competition rules", he added, while declining specific comment on the new case.
The investigation has been opened into the US-based Facebook Inc., as well as into its subsidiaries in Germany and Ireland.
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