Meta, the group that owns Facebook, is providing German users of the social media platform a better overview of how their data is linked with different services following talks with the Federal Cartel Office on Wednesday.
Meta also owns Instagram, Messenger and WhatsApp.
The German watchdog said the new account overview provided to users "allows Meta's customers to decide for the first time in a largely free and informed manner whether they want to use Meta services in isolation or link them together."
However, officials also criticized the site's "Like" buttons and Facebook logins on other websites, saying greater clarity was needed on the way the data is used and processed "as accurately and neutrally as possible at a central point and how they can easily allow or refuse its use."
That also applied to the question of whether data processing across accounts can be lawful without the user's consent in certain exceptional cases, such as for security purposes, for example.
"Insofar as necessary consents have not been given in a sufficiently free and informed manner, they must be obtained," the cartel office said.
Meta said it would continue to cooperate with the authority and was "grateful that the Federal Cartel Office recognises our work for more transparency and choice."
In February 2019, the Cartel Office banned the group then known as Facebook from combining data from different sources without users' consent, a move that Meta took legal measures to try to prevent. The dispute has reached the European Court of Justice, which is due to decide on the case on July 4.