Because it uses Facebook user data, it can't be said for free, says a ruling

Because it uses Facebook user data, it can't be said for free, says a ruling

Because it uses Facebook user data

The Council of State confirms the orientation given by the Antitrust first and by the Lazio TAR then in the case against the social network giant

(Photo credit should read JOEL SAGET / AFP via Getty Images) A ​​service that exploits personal data for their own business cannot claim to be totally free. This was reiterated by the Council of State which rejected Facebook's appeal, providing confirmation that the social network cannot be defined as "free". The Irish division of the company had resorted to a provision of the Competition and Market Authority (Agcm) of 2018, already challenged before the Lazio TAR. The administrative court had reduced the Antitrust sanction from 10 to 5 million euros, however confirming the presence of incorrect conduct on the part of Facebook. Continuing the judicial process did not "reward" Mark Zuckerberg's company in Italy.

The decision of 29 March confirmed in the last instance the deceptive nature of the message addressed to users, validating the sanctioning of Facebook's behavior Ireland. When the story took hold in 2018, the company changed its welcome from “It's free and forever will be” to “It's fast and simple,” making it easier to find privacy settings. Too little according to the Antitrust Authority, which asked for greater transparency in the disclosure and thus ended up imposing a second fine of 7 million euros on the social media giant last February.

The story raises the dilemma of the transfer of personal data in exchange for a free service, leaving it to be made available to commercial entities that cannot be defined in advance. A business model that concerns numerous activities that have exploded over the years with web 2.0. "Coordinated action is needed between the various competent Authorities, to protect the market and protect the protection of personal data, at a European level", is the appeal of Andrea Lisi, president of Anorc Professioni, who also recalls the role of European legislation and of the GDPR in the "exploitation of personal data for commercial purposes". Some web giants are already taking steps to anonymize the data collected from their online activities: Google, for example, will abandon the cookie-based system to "hide" the search habits of individual users within cohort algorithms.

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Competition challenge to Facebook's 'superprofiling' of users sparks referral to Europe's top court

A German court that's considering Facebook's appeal against a pioneering pro-privacy order by the country's competition authority to stop combining user data without consent has said it will refer questions to Europe's top court.

In a press release today the Düsseldorf court writes [translated by Google]: ' … the Senate has come to the conclusion that a decision on the Facebook complaints can only be made after referring to the Court of Justice of the European Union (ECJ).

'The question of whether Facebook is abusing its dominant position as a provider on the German market for social networks because it collects and uses the data of its users in violation of the GDPR can not be decided without referring to the ECJ. Because the ECJ is responsible for the interpretation of European law.'

The Bundeskartellamt (Federal Cartel Office, FCO)'s 'exploitative abuse' case links Facebook's ability to gather data on users of its products from across the web, via third-party sites (where it deploys plug-ins and tracking pixels), and across its own suite of products (Facebook, Instagram, WhatsApp, Oculus), to its market power -- asserting this data-gathering is not legal under EU privacy law as users are not offered a choice.

The associated competition contention, therefore, is that inappropriate contractual terms allow Facebook to build a unique database for each individual user and unfairly gain market power over rivals who don't have such broad and deep reach into user's personal data.

The FOC's case against Facebook is seen as highly innovative as it combines the (usually) separate (and even conflicting) tracks of competition and privacy law -- offering the tantalizing prospect, were the order to actually get enforced, of a structural separation of Facebook's business empire without having to order a break up of its various business units up.

However enforcement at this point -- some five years after the FCO started investigating Facebook's data practices in March 2016 -- is still a big if.

Story continues

Soon after the FCO's February 2019 order to stop combining user data, Facebook succeeded in blocking the order via a court appeal in August 2019.

But then last summer Germany’s federal court unblocked the 'superprofiling' case -- reviving the FCO's challenge to the tech giant's data harvesting by default.

The latest development means another long wait to see whether competition law innovation can achieve what the EU's privacy regulators have so far failed to do -- with multiple GDPR challenges against Facebook still sitting undecided on the desk of the Irish Data Protection Commission.

Albeit, it's fair to say that neither route looks capable of 'moving fast and breaking' platform power at this point.

In its opinion the Düsseldorf court does appear to raise questions over the level of Facebook's data collection, suggesting the company could avoid antitrust concerns by offering users a choice to base profiling on only the data they upload themselves rather than on a wider range of data sources, and querying its use of Instagram and Oculus data.

But it also found fault with the FCO's approach -- saying Facebook's U.S. and Irish business entities were not granted a fair hearing before the order against its German sister company was issued, among other procedural quibbles.

Referrals to the EU's Court of Justice can take years to return a final interpretation.

In this case the ECJ will likely be asked to consider whether the FCO has exceeded its remit, although the exact questions being referred by the court have not been confirmed -- with a written reference set to be issued in the next few weeks, per its press release.

In a statement responding to the court's announcement today, a Facebook spokesperson said:

Today, the Düsseldorf Court has expressed doubts as to the legality of the Bundeskartellamt’s order and decided to refer questions to the Court of Justice of the European Union. We believe that the Bundeskartellamt’s order also violates European law.

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