Tech

Instagram and Whatsapp: BGH restricts Facebook data rage

In the future, Facebook will have to offer its users the option of collecting and linking data from other Internet services such as Instagram or Whatsapp. The Federal Court of Justice (BGH) lifted up in Karlsruhe on Tuesday a decision of the Higher Regional Court (OLG) Düsseldorf, with which the enforcement of a corresponding ruling by the Bundeskartellamt had been postponed. The authority had prohibited the operator of the social network from requesting blanket consent from its users to collect and link data without offering the alternative of less extensive data use.

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The presiding judge of the cartel senate, Peter Meier-Beck, said on the grounds that there were no serious doubts about Facebook’s dominant position in the German market for social networks, nor “that Facebook is abusing this dominant position with the terms of use prohibited by the Cartel Office”. It is abusive that Facebook does not give its users a choice: whether they want to use the network with more intensive personalization, which potentially has unlimited access to all data that has also been created outside of Facebook. Or whether you want personalization that is only based on data that you reveal on Facebook itself.

GDPR not crucial

Contrary to what was assumed by the Cartel Office, according to the BGH judges it is not decisive whether the terms of use violate the EU General Data Protection Regulation (GDPR). There is also no fundamental antitrust ban on extended data use as long as there is a choice for the customer. This is also important for the competition.

The lawyer from Facebook argued in vain during the trial that the use of so-called off-Facebook data is a great advantage for customers. This would make Facebook a better product. He also highlighted the significant economic ramifications that an immediate implementation of the order would have.

Facebook offers its users, among other things, advertising tailored specifically for them. The basis for this is, for example, other websites visited or the use of the Like button. Data from Whatsapp and Instagram are also merged with Facebook.

Cartel Office satisfied

The President of the Cartel Office, Andreas Mundt, was satisfied with the decision. Data is a crucial factor for economic power and for the assessment of market power on the Internet. “The decision gives us important pointers on how we should deal with data and competition. If data is collected and used illegally, it must be possible to intervene under antitrust law to prevent abuse of market power.”

From the point of view of the competition law expert Prof. Rupprecht Podszun from the Heinrich Heine University Düsseldorf, the decision is a spectacular success for the Federal Cartel Office and an important signal for competition on the Internet. The Facebook case is considered a pioneer case worldwide. However, Facebook has the opportunity to have the decision examined again in the main proceedings.

Addendum of June 23, 2020, 6:56 p.m.

A Facebook spokesman said about the verdict: “Today’s decision relates to the preliminary proceedings for the decision to suspend the OLG Düsseldorf. The main proceedings before the Court of Appeal have not yet been completed.” Facebook will continue to defend its position that there is no abuse under antitrust law. “There will be no immediate changes for the people or companies who use our products and services in Germany”said the spokesman.

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