German newspaper Frankfurter Allgemeine reported that a glitch potentially allowed anyone access to the contact lists of subscribers.
New subscribers to Facebook are required to enter their email address. However, by entering the email address of an existing user, it was possible to view their full list of contacts, until they had responded to a security request.
Germany's consumer affairs minister Ilse Aigner criticised the company for a "series of dubious practices".
The glitch shows "Facebook's lack of respect for the privacy of internet users", she told the newspaper.
Justice minister Sabine Leutheusser-Schnarrenberger also criticised Facebook, telling the newspaper it "lacked consideration in the management of personal data".
Facebook has become the world's most popular social network with around 500 million users, but it has been dogged by complaints about poor privacy protection.
Randi Zuckerberg, the sister of co-founder Mark Zuckerberg, told reporters at a forum in Dubai on Sunday that privacy was the company's top concern and it would continue to give people more controls.
Internet privacy is a particularly contentious issue in Germany, where the recent launch of Google's Street View service was delayed to allow residents the opportunity to block out their homes from public view.