Weird news - An agency in Germany declares the 'Facebook like' button as illegal

For software companies, especially in the area of web, the different standards followed by Government agencies the world over can make their job very difficult. What works in one area does not work in another area, and these restrictions can cause problems to the companies.
Consider the case of Facebook. It is one of the most widely used platforms in the area of social networks, and one of the most important tools is the 'Like' button that is there in the Facebook page. These allow items to become popular, and get more people access to such news / updates. For Facebook, the Like button is a very important tool, and any restrictions on such a tool can be significant. Well, a data protection agency in Germany is threatening the 'Like' button (link to article):

A German data protection authority is "unliking" Facebook's "Like" button.
The state of Schleswig-Holstein's data protection commissioner, Thilo Weichert, on Friday ordered state institutions to shut down the fan pages on the social networking site and remove the "Like" button from their websites, saying it leads to profiling that violates German and European law.
Facebook insisted on Friday that is in full compliance with European data protection laws.
On Friday, Weichert issued a statement saying technical analysis by his office shows Facebook violated German and European data protection laws by passing content data to the social network's servers in the U.S.