Meta Platforms Inc.’s Facebook lost its European Union court fight over a German antitrust order that homed in on the US tech firm’s power to cash-in on a vast trove of users’ data.
The EU’s Court of Justice ruled that Germany’s Federal Cartel Office didn’t overstep its powers in 2019 when it ordered Facebook to overhaul how it tracks its users’ internet browsing and smartphone apps. The move followed a groundbreaking antitrust probe that simultaneously looked into Facebook’s alleged violations of the EU’s strict data protection rules.
Tuesday’s case at the top EU court has been seen as a test of how far European antitrust regulators can go to make sure Silicon Valley firms don’t mishandle massive data sets gleaned from users to cement their market power.
“The judgment will have far-reaching effects on the business models of the data economy,” said Andreas Mundt, head of the Federal Cartel Office. “Data is a decisive factor in establishing market power. The use of personal data of consumers by large internet companies can be abusive under antitrust law.
Meta is facing EU scrutiny on multiple fronts, being subject to national and European Commission antitrust investigations, as well as data-protection probes. In May, Meta was hit by a record €1.2 billion ($1.3 billion) EU privacy fine and given a deadline to stop shipping users’ data to the US after regulators said it failed to protect personal information from the American security services.
In Tuesday’s EU case, Meta accused the German antitrust regulator last year of unlawfully conflating data protection and antitrust law to seek an unprecedented overhaul of the firm’s business model.
When competition watchdogs are looking at potential abuses of market dominance by the likes of Meta, they can also point to violations of the EU’s General Data Protection Regulation, the Luxembourg-based EU court ruled. In such cases antitrust agencies must cooperate with other authorities, the court added.
Read More: Meta Hit With EU Antitrust Charges Over Marketplace Service
A German court sought the EU tribunal’s view on the scope of the bloc’s rules in the case, which constituted a novel approach by regulators to use an antitrust probe to also tackle data privacy concerns.
The company said it is “evaluating” the EU court’s decision “and will have more to say in due course.”
The EU’s GDPR, which took effect in 2018, gave data watchdogs unprecedented fining powers and also made those authorities, the main supervisor for them.
The case is: C-252/21, Meta Platforms e.a. (Conditions générales d’utilisation d’un réseau social).
--With assistance from Karin Matussek.
(Updates with comment from regulator in fourth paragraph)
