German law by collecting and sorting the e-mail addresses of people who do not have accounts with the US-based social networking site, DPA reported
Johannes Caspar, a privacy commissioner who has powers to conduct inquiries and impose fines of up to 300,000 euros (375,000 dollars), said Facebook has been invited to formally respond by August 11 to the charge.
The Facebook software can search a user's computer, find the stored address book and extract e-mail addresses and full names. Facebook then invites those people to become users of its site.
"We consider the capture of data from third parties in this fashion impermissible under data-protection laws," said Caspar, who oversees privacy in the state of Hamburg - where Facebook also has an office.
The "friend finding" function has been criticized in other parts of the world as well. Non-users receive e-mails urging them to join that appear to come from a friend, but have really been generated by the Facebook server.
"We want to demonstrate that German data protection law also applies to foreign firms that have users in Germany," Caspar said.
A company is not allowed to collect information on non-clients, store it over the long term and exploit it for marketing purposes, he said.
Caspar said many Germans have complained that Facebook obtained information about their relationships without their permission. He said there was also the "disturbing" suspicion that Facebook cross- referenced the data to profile non-users' relationships.
A spokesman for Facebook Germany confirmed the company has received a request for comment from Caspar.
"We are currently looking into it and will gladly respond within the set time," he said.
German privacy commissioners act as both a privacy advocate and a tribunal. Their penalties can be appealed in regular courts.