eDiscovery Daily Blog

• February 13, 2019

Two days, two stories about Germans finding fault with companies’ handling of personal data.

According to Law360 (Facebook Ruling Gives Antitrust Weight To Data Privacy, written by Ben Kochman – subscription required), Germany’s Federal Cartel Office ordered Facebook last week to give users the right to opt in or out before the company merges data gleaned from users’ activity on other websites and apps to their Facebook accounts. Facebook uses this type of data, including from its own WhatsApp and Instagram as well as from third-party websites with its “like” or “share” buttons, to amass detailed profiles on consumers that fuel its lucrative targeted advertising operation.

Facebook users can reasonably expect that the social network is monitoring its activity on the platform for targeted advertising purposes, the German regulator said. But to extend that tracking to third-party sites — including those that have the company’s invisible Facebook Analytics software installed — without asking users first amounts to “exploitative abuse,” it said, in which the company is abusing its unique position as a social media giant for which users have no real replacement.

“In view of Facebook’s superior market power, an obligatory tick on the box to agree to the company’s terms of use is not an adequate basis for such intensive data processing,” FCO President Andreas Mundt said in a statement announcing the ruling.

The FCO explained its logic in a Q&A attached to the decision. Even though users do not suffer a financial loss from Facebook’s data collection, “the damage for the users lies in a loss of control,” the regulator said.

“They are no longer able to control how their personal data are used,” the authority wrote. “They cannot perceive which data from which sources are combined for which purposes with data from Facebook accounts and used e.g. for creating user profiles.”

“Due to the combining of the data, individual data gain a significance the user cannot foresee,” it added.

Facebook immediately pushed back, arguing in a blog post that the FCO “underestimates the fierce competition we face in Germany,” including from YouTube, Snapchat and Twitter.  The ruling “misapplies German competition law to set different rules that apply to only one company,” wrote the post by Yvonne Cunnane, head of data protection for Facebook Ireland, and company Associate General Counsel Nikhil Shanbhag. Facebook vowed to appeal the case and has a month to do so.

“There’s a sentiment issue here. People are developing feelings about Facebook, especially after what happened with Cambridge Analytica,” Pam Dixon, executive director of the World Privacy Forum (a consumer privacy nonprofit) said. “I wonder if Facebook is having a tin ear here to what its customer base really wants.”

So, what do you think?  Is this just the beginning of data privacy reform?  And, will “zee germans” have anything else to say about data privacy soon?  Please share any comments you might have or if you’d like to know more about a particular topic.

Image Copyright © Columbia Pictures Corporation

Sponsor: This blog is sponsored by CloudNine, which is a data and legal discovery technology company with proven expertise in simplifying and automating the discovery of data for audits, investigations, and litigation. Used by legal and business customers worldwide including more than 50 of the top 250 Am Law firms and many of the world’s leading corporations, CloudNine’s eDiscovery automation software and services help customers gain insight and intelligence on electronic data.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.