German Federal Cartel Office against Facebook: now the European Court of Justice will decide
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Is Facebook abusing its dominant position in the market by collecting data on its own platforms and on third-party websites and combining it in a large data pool? The Federal Cartel Office (“FCO”) has decided that unless the users consent to the use of the data, Facebook is abusing its position - a decision with far-reaching consequences for Facebook. It was therefore not surprising that Facebook strongly pushed back on the decision; however, the corresponding application was rejected in summary proceedings by the Federal Court of Justice ("FCJ"). The related Competitive Edge article can be found here.
Even though the Higher Regional Court of Düsseldorf has now issued a decision, this legal dispute is far from over. The Higher Regional Court of Düsseldorf doubts the compatibility of the FCO’s pioneering approach of linking data protection and competition law to find an abuse of a dominant market position by Facebook with European law. The Higher Regional Court of Düsseldorf has therefore filed a request for a preliminary ruling to the European Court of Justice (“ECJ”). The decision can be found here.
FCO ruling within Irish jurisdiction?
Most prominent among a list of seven main questions the Higher Regional Court of Düsseldorf asked, is whether it is in accordance with the General Data Protection Regulation for a national cartel office like the FCO (which is not a GDPR supervisory authority) to identify a violation of the GDPR by a company with its European headquarters in another member state and prohibit it as a form of abusing a dominant market position.
Has the FCO therefore inadmissibly infringed a (supposedly) conclusive order of competence of the GDPR? Consequently, a follow-up question to the ECJ is whether it is compatible with Art. 4 (3) TEU for a national cartel office (such as the FCO) to use a breach of the GDPR as a basis for an abuse of a dominant position if an investigation by the competent GDPR supervisory authority is already pending (as in this case by the Irish Data Protection Commission).
Can users consent to a monopoly?
The ECJ is also asked to determine whether one can declare effective consent, in particular voluntary consent under Art. 4 No. 11 GDPR, to a dominant company such as Facebook. This question goes to show that it is neither strictly a data protection nor a competition law case but rather something in between.
Where do we go from here?
The FCO could enforce its decision as of now. This first requires Facebook to submit an implementation plan to remedy the breach and then see what exactly meets the FCO's basic requirements.It is not known whether this has happened or will happen. As the FCO's decision is not yet legally binding, civil liability claims are looming in case the decision is rejected. Will the FCO therefore wait until the ECJ decides? It remains unclear.
For more information please contact Maren Steiert.
