Instagram and WhatsApp: European Court to rule on Facebook's data collection frenzy

In the dispute between the German Federal Cartel Office and Facebook over the sharing of user data, the European Court of Justice is now to rule.

The European Court of Justice (ECJ) is to rule on the extent to which Facebook may merge user data with its other services Whatsapp and Instagram. This was decided by the Düsseldorf Higher Regional Court on Wednesday in a dispute between Facebook and the German Federal Cartel Office. The authority had prohibited the social network operator from demanding blanket consent from its users to collect and link data without offering the alternative of less extensive data use.

Both parties have been disputing the February 2019 decision for more than two years. After the Federal Court of Justice (BGH) ruled in favor of the competition watchdogs in summary proceedings in June 2020, the Higher Regional Court now had to examine the case more thoroughly in the main proceedings. This also involves the question of whether the terms of use of Facebook services violate the EU General Data Protection Regulation (GDPR).

"The question of whether Facebook is therefore abusing its dominant position as a provider on the German federal market for social networks because it collects and uses the data of its users in breach of the DSGVO cannot be decided without referring the matter to the ECJ," the court further announced after a hearing on Wednesday. The German Federal Cartel Office had also proposed a corresponding preliminary ruling.

Criticism of Cartel Office ruling

On several other points, however, the court sided with Facebook and even contradicted the BGH's decision. For example, the Higher Regional Court was disturbed by the BGH's decision to have changed the reasoning of the Cartel Office ruling to an extent "that changes the essence of the cartel authority's decision." According to the BGH, Facebook's actions constitute an "imposed service extension" because users could not choose whether only their Facebook data would be evaluated (small data set) or whether data from other services would also be included (large data set). This could include not only Facebook subsidiaries such as Whatsapp or Instagram, but also third-party providers.

In addition, the court "raised the question of whether the antitrust violation of a lack of choice on the part of the Facebook user is covered by the Office's prohibition ruling at all." In addition to user consent, other possibilities could be considered with which Facebook could put an end to a possible antitrust violation. Facebook could not only close its social network in Germany, but also "grant a choice between the collection and use of a permitted small amount of data and the unpermitted large amount of data."

Likewise, the court accuses the Federal Cartel Office of formal errors. For example, the associated Facebook companies were not granted a legal hearing before the decision was issued. In addition, the office was not allowed to contact the German branch of Facebook and the U.S. corporate headquarters, but only the European headquarters in Ireland. Thus, the Cartel Office had "not found any indications that the Irish Facebook company would not comply with the antitrust authority's requirement and that for this reason the parent company would also have to be held accountable."