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German court rules Facebook must curb data pooling in antitrust abuse case

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Germany’s top court has ruled that Facebook must comply with demands from the national antitrust regulator to stop pooling user data across its platforms - a decision which privacy activists hope could set a precedent.

The Bundeskartellamt (Federal Cartel Office) had condemned Facebook for pooling user data from third-party apps such as WhatsApp and Instagram, as well as from websites via embedded 'Like' and 'Share' buttons. The latter allows for the tracking of people who do not have Facebook accounts.

This aggressive data-harvesting activity allows Facebook to display precisely targeted and lucrative advertising.

In February 2019, the German regulator told Facebook that it must stop pooling data from third-party apps and websites unless users had given “qualified” consent, arguing that a single click in agreement to long and complex terms and conditions is insufficient, as users have little choice other than to agree. In August 2019, a court in Dusseldorf agreed to suspend the regulator’s banning order while the antitrust case continued.

Now, the Federal Court of Justice – Germany’s top court – has backed the view of the Bundeskartellamt that Facebook has exploited its market dominance to harvest user data non-consensually. This means that Facebook must comply with the banning order. It has four months to lay out a plan for how to adhere to these restrictions on data collection, followed by 10 months for implementation.

Lead judge Peter Meier-Beck said that there is “no serious doubt” that Facebook has a dominant position or that it had abused this position to harvest data from non-consenting users. He said that it is irrelevant to this case whether Facebook’s terms are aligned with EU data laws, because they do not give users the right to choose whether Facebook tracks them or not.

“Facebook must give users the choice to reveal less about themselves – above all what they reveal outside of Facebook,” he wrote. He added that if there was healthy competition in the social media sector, users would be able to choose an alternative platform which offers more privacy.

Bundeskartellamt President Andreas Mundt welcomed the ruling as a signal that data collection is an antitrust issue: “Data is a crucial factor for economic power and for judging market power on the internet. If data are collected and exploited illegally, it should be possible to take antitrust action to prevent the abuse of market power.”

Germany is the first country to indicate that data collection can be an antitrust issue; this could set a precedent for similar rulings in other countries.

“The cartel office is attempting to tame the tech giants and to stop the build-up of economic power through integration of data to 'super profiles'.  This is something new in terms of antitrust law,” said Professor Rupprecht Podszun, a competition law expert at Heinrich Heine University, speaking to Reuters.

A Facebook spokesperson said: “We will continue to defend our position that there is no antitrust abuse. There will be no immediate changes for people or businesses who use our products and services in Germany.”

Facebook may continue to appeal the banning order and will continue to defend itself against accusations of antitrust abuse.

In July last year, the European Court of Justice ruled that websites which incorporate 'Like' and 'Share' buttons are liable for tracking and must request user consent for data to be transferred to Facebook.

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