1 00:00:00,120 --> 00:00:05,480 Speaker 1: Belgium's data privacy watchdog is accusing Facebook of unprecedented monitoring 2 00:00:05,519 --> 00:00:08,400 Speaker 1: of the browsing habits of millions of people in Belgium, 3 00:00:08,720 --> 00:00:11,480 Speaker 1: regardless of whether they're signed up for the service or not. 4 00:00:11,960 --> 00:00:15,360 Speaker 1: The Privacy Commission is seeking a court order forcing Facebook 5 00:00:15,400 --> 00:00:19,000 Speaker 1: to stop any collection of data for advertising purposes and 6 00:00:19,120 --> 00:00:22,720 Speaker 1: providing misleading information to users, under the threat of a 7 00:00:22,760 --> 00:00:27,240 Speaker 1: two nine thousand dollar daily penalty. The company said it 8 00:00:27,320 --> 00:00:31,760 Speaker 1: disagreed with the allegation allegations. Joining us is Don Applin 9 00:00:31,800 --> 00:00:36,559 Speaker 1: Bloomberg Law, Managing Editor for Privacy and Data. Don Facebook 10 00:00:36,600 --> 00:00:40,040 Speaker 1: has been a target for Belgium's Data Protection Commission since 11 00:00:40,080 --> 00:00:43,559 Speaker 1: at least and it's gone to court. Tell us what 12 00:00:43,840 --> 00:00:47,120 Speaker 1: happened when a court ordered it to stop storing non 13 00:00:47,200 --> 00:00:51,559 Speaker 1: users personal data. Well, Facebook kind of objected to the 14 00:00:51,600 --> 00:00:54,080 Speaker 1: fact that a Belgian court was even looking at it, 15 00:00:54,600 --> 00:00:59,360 Speaker 1: and appealed, excuse me, it's got that Friday going on, Um, 16 00:00:59,480 --> 00:01:04,000 Speaker 1: that's what it is, and and appealed, and the appeals 17 00:01:04,000 --> 00:01:07,200 Speaker 1: court said, you know, we kind of agree that, uh, 18 00:01:07,240 --> 00:01:11,000 Speaker 1: in fact, this this dispute should be being dealt with 19 00:01:11,040 --> 00:01:15,040 Speaker 1: in Ireland because that's where Facebook has its primary headquarters. 20 00:01:15,040 --> 00:01:18,480 Speaker 1: In the EU, so they basically won the appeal on this. 21 00:01:19,319 --> 00:01:21,200 Speaker 1: I went back to the Commission and they started kind 22 00:01:21,200 --> 00:01:23,840 Speaker 1: of thinking about how they could rejigger things so that 23 00:01:23,880 --> 00:01:29,119 Speaker 1: it was more palatable focused on people in Belgium. So done. 24 00:01:29,200 --> 00:01:34,560 Speaker 1: What exactly is Facebook doing that the Belgians find so objectionable? Well, 25 00:01:34,600 --> 00:01:36,560 Speaker 1: it would be really great if we knew exactly what 26 00:01:36,640 --> 00:01:41,080 Speaker 1: Facebook was doing, but you know, not as exactly. It's 27 00:01:41,120 --> 00:01:43,480 Speaker 1: all the stuff behind the scenes that they do that 28 00:01:43,640 --> 00:01:49,160 Speaker 1: drives their engine of you know, behavioral targeted advertising. Um, 29 00:01:49,240 --> 00:01:52,520 Speaker 1: the ways that they gathered data to make those ads 30 00:01:52,560 --> 00:01:56,200 Speaker 1: when you're on your Facebook page actually be meaningful to you. 31 00:01:56,760 --> 00:02:00,400 Speaker 1: So they are collecting data from people who click like Mutton's, 32 00:02:01,000 --> 00:02:04,400 Speaker 1: they are collecting data through their advertising data analytics thing 33 00:02:04,440 --> 00:02:08,200 Speaker 1: called pixels or pixels that is a basically a way 34 00:02:08,200 --> 00:02:10,760 Speaker 1: that the advertisers can put information on their websites that 35 00:02:10,840 --> 00:02:14,000 Speaker 1: allows them to know how often things are being engaged 36 00:02:14,520 --> 00:02:16,560 Speaker 1: and and Facebook is drawing data from that, or at 37 00:02:16,600 --> 00:02:19,960 Speaker 1: least allegedly is. And then social plug ins on you know, 38 00:02:20,040 --> 00:02:23,080 Speaker 1: on a person's website that says, you know here, click 39 00:02:23,120 --> 00:02:26,200 Speaker 1: here and it will take you over to Facebook. All 40 00:02:26,240 --> 00:02:29,040 Speaker 1: of those are ways that they can gather information, um 41 00:02:29,120 --> 00:02:31,040 Speaker 1: and a lot of that is happening, you know, basically 42 00:02:31,120 --> 00:02:33,800 Speaker 1: without people knowing that that's what's you know, what's what's 43 00:02:33,800 --> 00:02:38,600 Speaker 1: going on now. Facebook says that it disagrees with the 44 00:02:38,600 --> 00:02:41,920 Speaker 1: Belgium watch dogs claims and that putting people in control 45 00:02:41,919 --> 00:02:44,960 Speaker 1: of their privacy is at the heart of everything we do. 46 00:02:45,480 --> 00:02:49,360 Speaker 1: Let's talk about the consent that you sign up for 47 00:02:49,560 --> 00:02:55,679 Speaker 1: when you're using Facebook and what that allows Facebook to do. Well. 48 00:02:55,720 --> 00:02:57,840 Speaker 1: I think, you know, Facebook has come a long way 49 00:02:57,840 --> 00:03:00,680 Speaker 1: and being at least a little more trans parent about 50 00:03:00,800 --> 00:03:03,920 Speaker 1: what they do and giving some you know, giving users 51 00:03:04,000 --> 00:03:07,800 Speaker 1: some control over their privacy. But I think there's so 52 00:03:07,880 --> 00:03:11,840 Speaker 1: much going on there that when they use terminology to 53 00:03:11,960 --> 00:03:15,160 Speaker 1: describe some of their mechanisms, it's not entirely clear to 54 00:03:15,240 --> 00:03:17,720 Speaker 1: a lot of users that they are actually giving consent 55 00:03:17,960 --> 00:03:19,680 Speaker 1: for this data to be pulled up. And I think 56 00:03:19,680 --> 00:03:22,280 Speaker 1: that goes to the heart of what the both the 57 00:03:22,280 --> 00:03:25,680 Speaker 1: Belgian Privacy Commission is arguing about and saying that that's 58 00:03:25,720 --> 00:03:29,200 Speaker 1: that's unacceptable, and also what you know what Facebook frankly 59 00:03:29,240 --> 00:03:30,760 Speaker 1: is saying, well, this is the backbone of what we 60 00:03:30,800 --> 00:03:33,400 Speaker 1: do and we're not we're not misusing this information. We're 61 00:03:33,400 --> 00:03:35,120 Speaker 1: just trying to be able to continue to give you 62 00:03:35,160 --> 00:03:38,400 Speaker 1: this free service. So how big a deal? And it's 63 00:03:38,480 --> 00:03:40,480 Speaker 1: I mean, obviously this seems like it's a big deal 64 00:03:40,520 --> 00:03:42,400 Speaker 1: for Facebook. How big a deal is it for them 65 00:03:42,480 --> 00:03:44,600 Speaker 1: to be able to collect the information in the way 66 00:03:44,640 --> 00:03:47,560 Speaker 1: that they do. I think it probably this or some 67 00:03:47,720 --> 00:03:51,480 Speaker 1: other version of this is almost necessary. Um, it's it's 68 00:03:51,480 --> 00:03:55,200 Speaker 1: the it's the it's the money stream for Facebook is 69 00:03:55,240 --> 00:03:58,760 Speaker 1: to be able to offer app advertising and haven't be targeted. 70 00:03:59,160 --> 00:04:01,160 Speaker 1: So I'm I I think it's it would be it 71 00:04:01,200 --> 00:04:03,600 Speaker 1: would be potentially devastating if they couldn't you do this 72 00:04:03,640 --> 00:04:06,240 Speaker 1: at all? But I think that's an unlikely result here, 73 00:04:07,440 --> 00:04:10,680 Speaker 1: don't What about the people who haven't signed the consent? 74 00:04:11,080 --> 00:04:15,240 Speaker 1: The authorities in Belgium are saying that these similar techniques 75 00:04:15,400 --> 00:04:18,599 Speaker 1: are being used to track non users of Facebook for 76 00:04:18,680 --> 00:04:21,600 Speaker 1: commercial purposes, right, And that's the thing that I think 77 00:04:21,640 --> 00:04:23,560 Speaker 1: they and they said it yes, or said it in 78 00:04:23,640 --> 00:04:27,120 Speaker 1: their hearing presentation and support of their complaint, that that's 79 00:04:27,240 --> 00:04:30,800 Speaker 1: that is exactly what bothers them the most. Um. Yeah, 80 00:04:30,800 --> 00:04:34,679 Speaker 1: I think that that is a really a big significant problem, 81 00:04:34,760 --> 00:04:38,560 Speaker 1: especially in the EU, especially with the new EU Privacy 82 00:04:38,560 --> 00:04:42,040 Speaker 1: regime taking effect next year, which is even more focused on, 83 00:04:42,080 --> 00:04:47,080 Speaker 1: you know, needing specific consent from whomever you're collecting data from. 84 00:04:47,360 --> 00:04:50,840 Speaker 1: Down There's also an issue, isn't there about um Facebook? 85 00:04:50,880 --> 00:04:52,719 Speaker 1: You know, if you are using Facebook but then you 86 00:04:52,800 --> 00:04:56,880 Speaker 1: stop using it, their system allows them to keep tracking 87 00:04:56,920 --> 00:05:00,240 Speaker 1: what you're doing even though you're not on the site anymore. Yeah, 88 00:05:00,279 --> 00:05:02,200 Speaker 1: and that's that's definitely. That's kind of another. I mean, 89 00:05:02,200 --> 00:05:05,320 Speaker 1: there's all sorts of little gradiations and differences here, and 90 00:05:05,320 --> 00:05:09,920 Speaker 1: there's been different pieces of UH data protection authorities all 91 00:05:09,920 --> 00:05:13,000 Speaker 1: over the U focusing on little components, that being one 92 00:05:13,040 --> 00:05:16,479 Speaker 1: big one that you know, somehow I'm logged off, but 93 00:05:16,560 --> 00:05:18,360 Speaker 1: the system is still working to collect at it and 94 00:05:18,400 --> 00:05:20,520 Speaker 1: they've been so I can't remember which one it was, 95 00:05:21,200 --> 00:05:23,640 Speaker 1: which one of the data protection authorities was was fairly 96 00:05:23,680 --> 00:05:25,520 Speaker 1: successful in getting them the back off. I might have 97 00:05:25,560 --> 00:05:27,479 Speaker 1: been the Dutch, I can't remember, but they, you know, 98 00:05:27,520 --> 00:05:29,120 Speaker 1: to get them to back off a little bit. I mean, 99 00:05:29,120 --> 00:05:32,839 Speaker 1: Facebook's got a lot of control over how they do things, 100 00:05:33,040 --> 00:05:36,720 Speaker 1: so they can make some adjustments here and there um 101 00:05:36,800 --> 00:05:39,680 Speaker 1: and still not lose their ability to do behavioral advertising. 102 00:05:41,120 --> 00:05:44,880 Speaker 1: Will Belgium be able to pursue this even though Facebook 103 00:05:45,040 --> 00:05:47,560 Speaker 1: one the appeal saying that it should have been done 104 00:05:47,640 --> 00:05:50,400 Speaker 1: in Ireland. Well, I think there's a lot that the 105 00:05:50,680 --> 00:05:54,360 Speaker 1: Belgian uh Privacy Commission has done to try to make 106 00:05:54,480 --> 00:05:56,880 Speaker 1: this focus now on Belgium. You keep hearing like you 107 00:05:56,960 --> 00:05:58,839 Speaker 1: started off, you're talking about it. It's it's a certain 108 00:05:59,000 --> 00:06:02,799 Speaker 1: eleven point for million people in Belgium who use Facebook 109 00:06:02,960 --> 00:06:06,080 Speaker 1: or you know, and it's less about kind of the 110 00:06:05,680 --> 00:06:09,240 Speaker 1: in the practices that applies across the board. So I 111 00:06:09,240 --> 00:06:11,880 Speaker 1: think they're trying to you know, they're trying to make 112 00:06:11,880 --> 00:06:15,800 Speaker 1: the point that regardless of UM, Facebook Ireland, you know, 113 00:06:15,839 --> 00:06:18,920 Speaker 1: Facebook being in Ireland, that you know, they're they they 114 00:06:18,920 --> 00:06:21,920 Speaker 1: are obligated to protect their citizens who are affected by 115 00:06:21,960 --> 00:06:25,479 Speaker 1: this in Belgium if in fact, on they're able to 116 00:06:25,720 --> 00:06:29,359 Speaker 1: the Belgian regulators are able to really keep a court 117 00:06:29,360 --> 00:06:33,800 Speaker 1: case going against Facebook here despite that appeal ruling. UM, 118 00:06:33,839 --> 00:06:35,520 Speaker 1: and they do convince the court that you know, there 119 00:06:35,560 --> 00:06:39,080 Speaker 1: are the there's a real connection to Belgium. What kind 120 00:06:39,120 --> 00:06:41,960 Speaker 1: of relief can we expect them to want a court 121 00:06:42,000 --> 00:06:44,800 Speaker 1: to impose. Well, I'm sure they'll shoot for the mean, 122 00:06:44,839 --> 00:06:46,600 Speaker 1: I mean, they are shooting for the moon. They're gonna 123 00:06:46,600 --> 00:06:51,159 Speaker 1: want them to completely change everything they're doing. Um, but 124 00:06:51,240 --> 00:06:53,400 Speaker 1: I think you know, there's always an opportunity for this 125 00:06:53,480 --> 00:06:56,000 Speaker 1: to be resolved. I mean, Facebook says, you know, we'd 126 00:06:56,040 --> 00:06:57,680 Speaker 1: be glad to sit down and talk to Belgium, and 127 00:06:57,720 --> 00:06:59,560 Speaker 1: of course they throw in there and the Irish Data 128 00:06:59,560 --> 00:07:02,800 Speaker 1: Protection Authority at the same time, um and and and 129 00:07:02,839 --> 00:07:05,360 Speaker 1: come to some sort of discussion about changing this. At 130 00:07:05,360 --> 00:07:07,880 Speaker 1: the same time, Belgian says, look, we're done talking. That's 131 00:07:07,880 --> 00:07:10,480 Speaker 1: why we're in court now. So we're gonna ask for 132 00:07:10,600 --> 00:07:13,320 Speaker 1: basically everything. We want you to shut down all these 133 00:07:13,360 --> 00:07:16,680 Speaker 1: things that you're doing, you know, not track people when 134 00:07:16,720 --> 00:07:19,560 Speaker 1: they're when they're just when they're not users of Facebook. 135 00:07:19,640 --> 00:07:21,280 Speaker 1: We want you to you know. And and then then 136 00:07:21,320 --> 00:07:23,800 Speaker 1: there's the penalty there that June mentioned at the start. 137 00:07:23,840 --> 00:07:27,160 Speaker 1: There's a two hundred ninety six thousand dollar a day 138 00:07:27,200 --> 00:07:30,200 Speaker 1: find that they could uh seek, you know, and that's 139 00:07:30,360 --> 00:07:33,119 Speaker 1: but I think that's unlikely the court would grant something 140 00:07:33,200 --> 00:07:36,800 Speaker 1: that extreme. Don in about thirty seconds. Is there a 141 00:07:36,880 --> 00:07:41,680 Speaker 1: reason why there's so much scrutiny by European regulators, the 142 00:07:41,800 --> 00:07:45,800 Speaker 1: Dutch and the French and not the US. Well, I 143 00:07:45,800 --> 00:07:48,360 Speaker 1: think probably there is some scrutiny going on in the US, 144 00:07:48,600 --> 00:07:50,920 Speaker 1: but we played a little closer to the vest um. 145 00:07:50,960 --> 00:07:54,520 Speaker 1: I think there are the FTC is probably very interested 146 00:07:54,560 --> 00:07:57,360 Speaker 1: in what's happening in the U and paying attention to this, 147 00:07:57,880 --> 00:07:59,760 Speaker 1: but I also think there's a little bit more of 148 00:07:59,760 --> 00:08:02,760 Speaker 1: a business understanding here that you know. That's how you 149 00:08:02,800 --> 00:08:05,880 Speaker 1: get free internet is you have some of these mechanisms 150 00:08:05,880 --> 00:08:07,960 Speaker 1: in place. We've got to end it there, but thank you. 151 00:08:08,040 --> 00:08:12,000 Speaker 1: Don Applin's the Bloomberg Law Managing editor for Privacy and Data. 152 00:08:12,080 --> 00:08:14,920 Speaker 1: That's it for this edition of Bloomberg Law. Thanks to 153 00:08:14,960 --> 00:08:17,680 Speaker 1: our producer Marx and Hiss Couchi and our technical director 154 00:08:17,800 --> 00:08:21,080 Speaker 1: Chris strike Homey will be back on Monday. Have a 155 00:08:21,120 --> 00:08:25,200 Speaker 1: great weekend. Coming up next Bloomberg Markets with Corey Johnson. 156 00:08:25,600 --> 00:08:26,880 Speaker 1: This is Bloomberg