Libra Investigation: EU Balks At Allowing Facebook To See Spending Habits

Whether it's an investigation to see if an investigation is due or a full-blown investigation in its own right depends on which news report you read.
However, the inescapable truth is that the EU competition authorities have Facebook's proposed cryptocurrency, Libra, in their sights.

It would appear this isn't just about a massive organisation partnering with others to launch a currency that has no state backing, that's probably one for the financial authorities to look at.

No, this latest probe, or investigation to see if a probe is required -- it has rarely decided it isn't -- is more about Facebook being at the centre of a cryptocurrency, which it has suggested the Swiss regulator could oversee. Reading between the lines, this appears to be more of an idea than something the Swiss have signed up for.

Crucially, regardless of who may or may not oversee the currency, we have old friends meeting up once again -- data and privacy. Facebook is rarely a welcome host for gatherings between the two, and so it is little surprise that eyebrows have been raised.



Reports suggest that EU regulators are concerned that a tech giant the size of Facebook would have access to data about people's use of Facebook as well as their messaging activity on WhatsApp and Messenger, not to mention how many fluffy kittens they have 'liked' on Instagram. Adding what they are spending their money on into the mix, it just looks like a step too far.

Remember, Facebook promised it would not combine data resources with WhatsApp when it bought the messaging service. Turns out it had its fingers crossed behind its back at time and so went ahead and did exactly that. A fine of 110m Euros two years ago was hardly a surprise given the circumstances. The German competition authorities have since told Facebook to cease linking data between its apps.

So there is form here. EU authorities were rather peeved at Facebook saying one thing and doing the opposite, and given we're talking about Facebook here, there is little belief that a tiger can change its proverbial spots and be trusted with more highly personal data.

It may well end up getting away with merging data between its four famous messaging and social apps, but getting a glimpse into spending habits now appears to be where the EU authorities will draw a very deep line in the sand. In fact, it would be difficult to know how Facebook could combine spending data with social insights to give an incredibly detailed picture of Libra users without their explicit consent. 

While people will click "okay" with little thought to carry on looking at a posh shop's new range of boots and surfing dogs, they are likely to wonder why a tech giant wants to know what money they have coming in and how they spend it. It would also required very detailed consent for any payments with regard to religion, trade union membership, race and health under GDPR.

For Facebook, the proposed new cryptocurrency appears set to lead to another round of investigation by financial regulators as well as the competition authorities -- and to be honest, there is little love for Facebook in the room.

Nobody wants to be the regulator who trusted a tiger to babysit their kids. 

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