Facebook is being investigated by an official watchdog in Germany for its privacy rules since Wednesday. The investigating body suspects that the California-based company is abusing its dominant market position to force users to surrender undue amount of personal information.

The social media giant has constantly faced obstacles in its terms of service in Germany. The country ordered to pay a fine for requiring its users to give too much intellectual properties to the company.

"There is a preliminary suspicion that Facebook's terms of use breach data protection rules," stated the Federal Cartel Office of Germany.

The FCO also said that it had "initiated a proceeding against Facebook Inc., USA, the Irish subsidiary of the company and Facebook Germany GmbH".

"The authority is investigating suspicions that with its specific terms of service on the use of user data, Facebook has abused its possibly dominant position in the market for social networks," the office statement added.

According to the FCO, it found that there was a prior suspicion that the social media network's conditions of use were violating the country's data protection provision. The authority believed that this "could represent an abusive imposition of unfair conditions on users."

Facebook denied the charges of misconduct.

"We are confident that we comply with the law and we look forward to working with the Federal Cartel Office to answer their questions," Tina Kulow said. She is Facebook's corporate communication director for Benelux and Northern, Central and Eastern Europe.

Andres Mundt, head of the cartel office in Germany stated that market dominant companies have a unique responsibility. The collection of users' personal data is vital to Facebook's advertising business that is why it warrants careful scrutiny.

Before a user can access Facebook, he must first agree to the collection and utilization of his personal information. This is done by giving his consent to the company's term of use. But the extensive permission granted to the company is difficult for ordinary users to understand.