By Valentina Pop and Sam Schechner 

The European Union is ramping up pressure on Facebook Inc. to better spell out to consumers how their data is being used or face sanctions in several countries.

V ra Jourová, the European Commissioner for Justice, Consumers and Gender Equality, on Thursday warned the U.S. tech firm that if it doesn't change its "misleading terms of service" by the end of the year, that she will call on consumer-protection authorities in EU countries to impose sanctions.

"I am becoming rather impatient. We have been in dialogue with Facebook almost two years," Ms. Jourová said at a press conference. "I want to see not progress -- that is not enough for me. I want to see results."

A spokesman for Facebook said it has made changes to its terms based on regulators. The company "will continue our close cooperation to understand any further concerns and make appropriate updates," he said.

At issue for Ms. Jourová was the clarity of Facebook's terms of service. The company updated them in the spring, but Ms. Jourova said they remain insufficiently explicit about how the company monetizes users' data. A spokeswoman for the EU's executive arm said that directing users via hyperlinks to Facebook's "data policy," which gives some more detail on ad targeting, isn't enough for consumers.

"I expect Facebook to be honest with those that go and try to understand" its terms and conditions, Ms. Jourová said.

The sharply worded salvo comes on top of a series of legislative proposals and regulatory actions from Europe aimed at reining in the power and perceived excesses of a cadre of big tech companies. The EU in May implemented a sweeping new privacy law, GDPR, and its parliament recently approved a draft copyright bill aimed at making Silicon Valley companies pay more money to support music firms and news publishers.

The EU's executive arm has also issued fines for alleged anticompetitive conduct by Alphabet Inc.'s Google, and ordered EU countries to recoup allegedly unpaid taxes from Apple Inc. and Amazon.com Inc. On Wednesday, antitrust officials disclosed a new preliminary probe into Amazon's treatment of third party sellers.

The issue raised Thursday is legally separate from complaints lodged against Facebook by activists under the EU's strict privacy law, GDPR, which is enforced by a separate set of national privacy regulators. But the two issues aren't entirely unrelated.

Some EU privacy regulators, including Ireland's Data Protection Commissioner, which is Facebook's lead regulator in the bloc, are looking into complaints that Facebook requires users to agree to its terms of service to use the social network. Privacy activists argue that users aren't freely giving their consent to the terms. But Facebook counters that data it collects is necessary to fulfill its contract with users to provide "a personalized experience" -- and contractual necessity is also a permitted justification under GDPR. Naturally, any changes to Facebook's contractual terms could affect the arguments on both sides

In contrast to Facebook, Ms. Jourova on Thursday praised another U.S. platform, the home-rental site Airbnb Inc., for committing to change its terms and conditions after a demand earlier this year. The EU, in coordination with national consumer-protection authorities, had asked Airbnb for instance improve the presentation of its prices.

"I welcome Airbnb's willingness to do the necessary changes to ensure full transparency and understanding of what consumers pay for," she said.

An Airbnb spokesman didn't immediately respond to a request for comment.

Write to Valentina Pop at valentina.pop@wsj.com and Sam Schechner at sam.schechner@wsj.com

 

(END) Dow Jones Newswires

September 20, 2018 06:31 ET (10:31 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.
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