Düsseldorf Court of Appeal Revokes Antitrust Authority's Data Processing Prohibition for Facebook

On 26 August 2019, the Düsseldorf Court of Appeals has granted suspensive effect to Facbooks appeal against the order by the German Bundeskartellamt (Federal Antitrust Authority) prohibiting Facebook from combining user data from various sources because: "there are serious doubts as to the legality of these orders.") and: "Contrary to the view held by the Federal Cartel Office, the data processing by Facebook, which the Federal Cartel Office has objected to, does not give rise to any relevant damage to competition, nor does it give cause for concern about any undesirable development in competition." (Section B. page 6 of the Court decision).



On 7 February 2019, the German Bundeskartellamt (Federal Antitrust Authority) had published and translated “background information” on its decision of 6 February 2019 against Facebook (Bundeskartellamt, “Bundeskartellamt prohibits Facebook from combining user data from different sources“, PR of 7 February 2019). The “background information” revealed that the decision was based on a particular interpretation of the GDPR which was and stil is not the main school of thought in data protection law. The fact that a federal authority appeared to expand its competence to area of data protection offering its own unique interpretation of the GDPR had caused major debate in Germany (see Härting, "The German Antitrust Authority’s Interpretation of GDPR Consent – Facebook Decision", CRonline Blog, 8 February 2019).

Key Reasons for the Court

"1. Upon summary examination, the assumption of an abuse of exploitation in the form of an abuse of conditions to the detriment of the users of the social network of Facebook already meets far-reaching legal concerns." (Section B.1., page 6 of the Court decision)

"Based on the Federal Cartel Office's findings, Facebook cannot be accused of having abused its dominant market position within the meaning of Section 19 para. 1 GWB either. Under this general clause, the abuse of a dominant position is prohibited." (Section B.1.b), page 7 of the Court decision)

"2. The appealed order can also not be based on the allegation of exclusionary conduct to the disadvantage of Facebook’s competitors (Section 19 para. 1, para. 2 no. 1 GWB). Pursuant to the stated provision, an abuse of market power applies in particular if another enterprise is directly or indirectly unfairly obstructed." (Section B.2., page 28 of the Court decision)

"a) Under the aspect of unfair obstruction, the order is already unlawful because its legal consequences are not suited to remedy the exclusionary conduct assumed by the Federal Cartel Office (Section 32 para. 1 and 2 GWB). This is substantiated in the fact that the Facebook order does not generally prohibit collection, association, and use of the disputed additional data but prohibits such only in the event that the private user of the Facebook network does not separately consent to this processing and association of additional data for the purposes of the Facebook network. It is clear that the impediment of Facebook’s horizontal competition - assuming such is based on the processing and association of additional data - can simply not be dependent on whether private Facebook customers consent to this data processing or not. An exclusion of Facebook’s competitors on the basis of processing of additional data can also be excluded if private Facebook users consent to his impediment of the market. The Federal Cartel Office’s order is thus an unsuitable remedy. As such, it interferes unreasonably with the rights of Facebook and for this reason alone is already unlawful." (Section B.2., page 28 and 29 of the Court decision, emphasis added)

"b) Furthermore, the statements of the Federal Cartel Office do not suffice to substantiate an admissible and viable exploitative abuse of Facebook." (Section B.2., page 29 of the Court decision, emphasis added)

Full Translation in English of the Court's Decision

Düsseldorf Court of Appeals, decision of 24 August 2019 in the antitrust administrative case VI-Kart 1/19 (V) against Facebook (translated by Apollo Lingua GbR)





Verlag Dr. Otto Schmidt vom 27.09.2019 18:32

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