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Facebook managed to block a pioneering order from the Federal Cartels Office in Germany earlier this year that would have banned it from combining user data through its own suite of social platforms – Facebook, Instagram and WhatsApp – without their consent .
A pioneer because the antitrust regulator had established relations with the European authorities in matters of privacy protection during a long-standing investigation into Facebook's data collection activities, leading him to conclude that Facebook's behavior in the German market, where it also considered it a monopoly, constituted "exploitative abuse". "
The Bundeskartellamt (FCO) order had been equated with a structural separation of Facebook's activities at the data level.
Facebook has appealed, delaying the application of the order. Today's decision by the Düsseldorf court grants a suspension (press release in German), which has the effect of tipping the case into a very long legal basis.
The FCO has one month to appeal. A spokeswoman confirmed to TechCrunch that she would. However, as the suspension of the order is suspended pending several years of appeal, it is unlikely that Facebook changes in the short term how Facebook operates because of this regulatory intervention.
This is undoubtedly a major victory for Facebook – winning in the first layer of appeal – and a major blow for "innovation" regulation (for what better) that sought to change the interpretation of the law of the current competition to address the dominance of the digital business model based on monitoring through the application of confidentiality-oriented data processing conditions.
European data protection regulators have the power to order the suspension of illicit data processing in the updated framework of the privacy framework (PGR) of the block.
But so far, such orders are as rare as goose bumps – unless a recent threat to Google also imposed by a German regulator of confidentiality. (The mere threat of an order in this case triggered a voluntary suspension of the processing of the data in question.)
This made the order of the FCO against Facebook all the more remarkable for daring and forethought. And means that the success of Facebook in removing the first legal hurdle is a depressing result for EU citizens who hope that the power of the platform related to the monitoring of Internet users hostile to respect for life could be regulated in a reasonable amount of time through an existing antitrust lens.
The European Commission The antitrust interventions of "big tech" have so far focused their attention elsewhere, in addition to taking years to conclude.
The chairman of the FCO, Andreas Mundt, commented on the decision of the Higher Regional Court of Düsseldorf in a statement. He said: "Data and processing are decisive factors for competition in the digital economy. The Higher Regional Court of Düsseldorf reacted differently today to the Bundeskartellamt to the main legal issues. These legal issues are very important for the future state of competition in the digital economy. We are convinced that we can act in this area on the basis of the existing antitrust law. For this reason, we will appeal the law to the Federal Court of Justice to clarify these issues. "
We also contacted Facebook for comments.
Professor Rupprecht Podszun, who holds a chair in German, European and German competition law at Heinrich Heine University, following the FCO's intervention, described the court as a "major coup" for the regulator.
"The FCO had accused Facebook of abusing its dominant position by illegally collecting and combining user data. Thus, he had ordered Facebook to change its terms of use within a year. The Düsseldorf judges have now stopped the implementation of this decision. They have serious doubts about the legality of the decision, "he said by e-mail. "The case is considered a historic affair against the digital giants and has gained worldwide recognition. Failing at the Düsseldorf court, at the very first stage, is a bitter outcome. "
Podszun said that the Düsseldorf court had not accepted the fact that it stems from a possible violation of the rules of privacy protection that it is automatically considered a violation of antitrust rules if a dominant company acts. This would require the court to find competitive damages, which is not the case here.
In addition, the court found that users decided independently whether or not they accepted the terms of use of Facebook when registering for the service. Nor did it recognize that Facebook's data collection was exploiting consumers because they could continue to make the same data available to other companies.
From now on, he thinks the legal round trips will probably take years – therefore, even if the FCO had to prevail before a higher court, the impact on Facebook's activities at that time would probably be exceeded . (In the meantime, it appeared earlier this year that Facebook was working to merge the backbone infrastructure of its three social networks – seeking to further reduce the privacy of cross-platform users, even if it scrambles units discreet trade in order to complicate any regulation in order to separate its activities.)
"The Cartel Office had been courageous in its decision and had explored new avenues. The regional superior
Court did not follow this reasoning. The FCO has embarked on the integration of a privacy inquiry into the assessment of competition. I have a lot of sympathy for this because the data has become a crucial competitiveness factor. So, I think that data collection should be a matter of antitrust law, "said Podszun.
"The law is at its limits with the giants of the internet. It's too slow. In a few years, a final decision on Facebook's privacy terms is too late. Before making his decision, the FCO had investigated the case for three years. The Google Shopping procedure of the European Commission lasted seven years. You can not tame these companies with such procedures and lengthy court cases. "
"This decision is an appeal to the legislator: if you want to regulate Google, Amazon, Facebook & Co., the existing tools are not enough," he added. "A new version of the antitrust law is currently pending in Germany. This is an opportunity to change the legal basis. In addition, data protection authorities must step up their efforts – they seem to lack the bravery of the antitrust watchdog. "
When asked how the legal bases needed to change to allow local antitrust legislation to cleverly meet the giants of the data mining platform, Podszun suggested four areas of concern. intervention: inform TechCrunch:
- Competition law must come out of the traditional definition of the market. There should be a rule that authorities can interfere with companies such as GAFA [Google, Apple, Facebook, Amazon] in cases where they enter new markets where they do not dominate yet but can easily tip the market. Conglomerate effects and digital ecosystems currently constitute a blind spot in competition law
- There may be room for a new example of what constitutes abuse in digital markets
- The German Competition Authority should have powers in the field of consumer law (there is currently no public application of consumer economic protection in Germany). An integrated approach to consumer and competition issues could be helpful (including, possibly, privacy). Privacy officials are particularly weak in Germany
- Procedures need to be speeded up, for example by stricter deadlines, less haggling over access to the file, technically better staff and higher priority setting by the authorities
"Everything is very difficult, but it is vital to have fresh air here," he added. "If it would have helped in the case in debate is a different question."
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