The German Federal Cartel Office (FCO) is the central competition authority whose task is to protect economic competition in Germany. Back in 2019 the FCO discovered that Meta, the company, which owns Facebook, Instagram and WhatsApp, was abusing its market power by collecting users’ data without their consent. Therefore, the FCO ordered Meta to stop this data collecting.
Now, three years later, the CJEU has weighed in on this dispute and has sided with the FCO.
Update, July 2023
The CJEU has recently released a judgment giving the national competition authorities (NCAs) the green light to have regard to data protection aspects, that are outside their authority, in order to combat practices that undercut market competition and give companies unfair advantages.
Thus, the German national competition authority FCO is completely in its rights to fine Meta for unfair practices, taking data collection aspects into account, which were originally outside its ambit.
The case
The data that Meta has provenly collected in the past and supposedly collects now is personal information from its users from its various platforms like Instagram, Facebook, WhatsApp and, now also, Metaverse.
This personal information contains extensive information like banking information, user preferences, friends and family of the users, profile information, private chats, location history, etc.
Under the terms and conditions, that all users sign when registering, Meta’s data collecting is allowed, thus Meta may not be violating any laws.
However, the Federal Cartel Office believes Meta has a business concept that’s completely detrimental to its competitors in the market. Apparently, it sells the data it collects from its users, mainly Instagram, Facebook and WhatsApp users, to advertisers and with the money from advertisers Meta buys out competitors like WhatsApp or Instagram or takes over the unique features from competitors, like Snapchat, thus leaving its competitors dead in the water.
Now this strategy makes Meta huge, and this size makes Meta attractive to advertisers, letting Meta sell more data thus the circle comes round and the FCO wants to keep the market fair for all and wants to reduce the data Meta collects thus protecting the privacy of German citizens and also restricting Meta.
Meta’s response
Meta went to court with the FCO based on whether the German antitrust agency overstepped its authority by using its power to address data protection concerns, which are the remit of national data protection authorities.
The German administrative courts eventually brought in the Court of Justice of the European Union (CJEU). Advocate General Athanasios Rantos at the CJEU said in September 2022 in a non-binding opinion:
“A competition authority may, in exercising its powers, take account of the compatibility of a commercial practice with the General Data Protection Regulation.”
Meaning competition authorities may take data protection and therefore the requirements of the General Data Protection Regulation (GDPR) into account in order to protect a competitive market, even though data protection is not in the scope of the competition authorities.
However, Rantos continues and says that competition authorities must consult with leading data protection authorities, which is in the case of Meta the Irish data protection agency, as Meta’s European Headquarters is based in Ireland. So far there has been no additional information about the case between Meta and the FCO from the FCO nor Meta.
Besides the Advocate General’s opinion, neither the CJEU nor any other European organ haven’t released a judgement or statement. Therefore, legal proceedings between the FCO and Meta are still ongoing and only time will tell what the final judgement will be.
Conclusion
Overall, this shows that companies will need to be more careful about competition and data protection regulations, as these are getting more entwined and interconnected in the EU.
As an example: Company A based in Spain must be alert about its data collecting in the Netherlands or its competitiveness in Poland, as more and more authorities in EU Member States are cooperating together to enforce data protection and competition policies.
As a recommendation it would be prudent to take up contact with the local competition and data protection authorities of the various Member States in order to sidestep possible legal issues when it comes to data collecting.
