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News - 27/07/20

German Federal Supreme Court affirms decision of the Federal Cartel Office (Bundeskartellamt) and orders Facebook to stop automatic data collection

On June 23, the German Federal Supreme Court reaffirmed the decision of the Federal Cartel Office (“FCO”) requiring Facebook to end the automatic data collection of users of its platforms. The decision was based on the argument that the company has a dominant position in the social media market and uses this predominance in an abusive way when subjecting its users of various platforms to unfair contractual clauses.

Facebook filed an appeal against the FCO resolution to the Superior Reginal Court in Düsseldorf. The request was granted by the court, although a final decision on the complaint has not yet been issued. However, the Federal Supreme Court annulled the application of the suspensive effect granted.

Therefore, the decision will have immediate effect, which implies the need for Facebook to take immediate action and the review its contractual clauses in order to comply with the requirements imposed by German authorities to establish an “explicit agreement” with users of their social media platforms in the country.

The question surrounding this case is whether the FCO has authority to analyze issues related to the application of the rules set out in the European Data Protection Regulation (EDPR).

Contrary to the appellate court´s opinion, the Federal Supreme Court understands that there is no need to assert the existence of an independent market for online advertising for social media and that Facebook has a dominant position in that market in order to demonstrate the abuse of power exercised by the company. Facebook abuse of its dominant position on the German market for social networks assumes competitive effects in the form of a restriction of freedom of choice to users.

Even though the decision of the German Federal Supreme Court is not yet definitive, it can be understood as a possible future position to be followed, in the sense that the GDPR and its parameters should be used as relevant tools to guide the application of antitrust and cartel laws in the context of the digital word, by emphasizing the intangible and substantial value that automatic data collection has within the social network market.