Germany's cartel office has found that Facebook abused its dominant market position, challenging the U.S. social network's model of monetizing the personal data of its 2 billion users worldwide through targeted advertising.
Presenting preliminary findings of its 20-month-old probe, the Federal Cartel Office said Facebook held a dominant position among social networks - a characterisation the company dismissed as "inaccurate".
The case is being closely watched in Germany, where concerns over data privacy are strong due to a history of state surveillance under Nazi and Communist rule. Facebook has been running an ad campaign to try to allay those fears.
Separately, Berlin will introduce a law in the new year imposing fines of up to 50 million euros ($59 million) on social media platforms that fail quickly to remove posts that propagate hate speech - a crime in Germany.
The competition authority objected to Facebook's requirement that it gain access to third-party data when an account is opened - including from its own WhatsApp and Instagram products - as well as how it tracks which sites its users access.
"Above all we see the collection of data outside the Facebook social network and its inclusion in the Facebook account as problematic," cartel office President Andreas Mundt said in a statement.